Tom Lee sees 2026 delivering 'joy, depression and rally' in one volatile year

GateUser-afe07a92 · 2026-01-06T12:21:06+00:00

Tom Lee predicts a volatile 2026 for financial markets, featuring a cycle of "joy, depression, and rally." He expects early-year fluctuations, influenced by Fed actions and improving economic indicators, followed by substantial gains. Energy and small-cap stocks are identified as potential outperformers.

GateUser-afe07a92

2026-01-06 12:21:06

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Source: Cryptonews Original Title: Tom Lee sees 2026 delivering ‘joy, depression and rally’ in one volatile year Original Link: Tom Lee, head of research at Fundstrat, has outlined a forecast for financial markets in 2026 that anticipates early-year volatility followed by a strong finish.

Lee characterized the expected market pattern as “joy, depression and a rally” compressed into a single year. The analyst drew parallels to 2025, which experienced weakness at the start before rallying to close higher, with April marking the low point for that year.

“The market will test the new Fed. That probably is the reason we have some fear this year,” Lee stated. He added that multiple factors support an optimistic outlook, including the anniversarying of tariffs, anticipated Federal Reserve rate cuts, and potential improvement in the Institute of Supply Management (ISM) index above 50.

Energy stocks represent one of Fundstrat’s top sector picks for the year, Lee said, noting the sector has lagged in recent performance.

Beyond the so-called Magnificent 7 technology stocks, Lee identified financials and small-cap stocks as sectors positioned for potential outperformance. The Magnificent 7 companies are expected to continue delivering strong earnings growth, according to the analyst.

Lee projected that earnings performance will exceed expectations, with other sectors experiencing re-rating while the Magnificent 7 may track earnings growth more closely. This dynamic could result in a lower overall price-to-earnings ratio for the broader market, he said.

The forecast comes as investors assess market positioning amid monetary policy changes and evolving economic indicators.

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NewDAOdreamer

· 01-08 16:24

Tom Lee is at it again. Are you tired of the old routine of volatility in early years and takeoff in later years...

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blockBoy

· 01-06 12:50

Tom Lee is at it again. This guy just loves to make statements like "drop first, then rise," to the point where my ears are calloused from hearing it.

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TestnetFreeloader

· 01-06 12:35

Tom Lee is starting to stir again, with the "joy depression rally." This guy's words just give off the unreliable vibe.

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FloorSweeper

· 01-06 12:34

lol tom lee's doing his usual three-act play again... joy, depression, rally—might as well throw in a soap opera episode while we're at it. early volatility = paper hands getting shaken out, strong finish = accumulation phase for the ones who actually read the technicals. classic market psychology setup tbh

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ReverseTrendSister

· 01-06 12:33

Tom Lee is stirring things up again. After a turbulent early period and a sharp surge later on, just listen and don't take it too seriously.

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