Tom Lee Predicts the S&P 500 Will Soar 10% in | Global Market News
The S&P 500 index, after two years of double-digit good points, has skilled some rocky instances in latest months. Investors’ considerations about how President Donald Trump’s import tariffs might have an effect on the economic system and company earnings weighed closely on the index in March and April, even briefly pushing it into a bear market. If tariff ranges are high, they may consequence in rising costs — and subsequently prices — for corporations and people.But Trump’s latest initial trade offers with the U.Ok. and China provided buyers hope that tariffs will likely be manageable, and that is helped the S&P 500 regain a important quantity of territory. The main benchmark has climbed 20% since its low in April.
Where to invest $1,000 proper now? Our analyst staff simply revealed what they imagine are the 10 best stocks to buy proper now. Learn More »Tom Lee, Fundstrat managing companion, has caught together with his prediction for S&P 500 good points for the full yr and now says, with corporations displaying energy in latest instances, he is even more assured the index will attain his forecast. Lee’s forecast of 6,600 implies a 10% climb from the index’s closing degree on June 3.How are you able to benefit from a rising S&P 500 this yr? Let’s discover out.
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A “more achievable” goalFirst, a fast observe about Lee’s forecast. The analyst, in an interview with CNBC earlier this week, stated that whereas reaching 6,600 appeared sophisticated a few weeks in the past, it now appears as if the index could also be set to make it occur. “I think businesses are in better shape now than they were in February,” he stated in the interview. “So, I think making 6,600 actually seems more achievable today than it did in February.”
In latest weeks, corporations throughout industries have reported earnings for the first quarter of the yr. Of the 98% of S&P 500 corporations that reported as of May 30, 78% delivered a optimistic earnings-per-share shock, and 64% introduced a optimistic income shock, in accordance with FactSet. This has helped stocks advance, at the same time as some components of uncertainty stay in the market — equivalent to ongoing tariff discussions and combined financial knowledge. But if tariff or financial headwinds do not strengthen, the S&P 500 may proceed to rise this yr to achieve Lee’s forecast.Now, there’s one very simple technique to rating a win from this motion, and it does not contain a lot time or effort. Instead, it includes one easy buy, the buy of shares of a fund that tracks the S&P 500. A unbelievable low-cost one is the Vanguard S&P 500 ETF (NYSEMKT: VOO). This exchange-traded fund replicates the composition of the benchmark, setting it up to ship an an identical efficiency.I call the Vanguard fund “low cost” as a result of its expense ratio is just 0.03% — ETF charges are expressed as expense ratios, and it’s best to all the time select one with a ratio of much less than 1% so it will not harm your long-term returns. This fund matches the invoice by a long shot.Betting on the benchmarkInvesting in this or a comparable ETF is a great technique to wager on the S&P 500’s efficiency as a result of it presents you publicity to the total benchmark with one easy operation. And this implies you do not have to fret about assembling a basket of the most closely weighted S&P 500 stocks to attempt to mirror the benchmark — as a substitute, this investment presents you publicity to the full index.So, must you be a part of in Tom Lee’s optimism about the S&P 500 and buy shares of the Vanguard S&P 500 ETF now? It’s a great concept, and here is why. If Lee is correct, you may set your self up for good points in the close to time period. The optimistic company earnings we have seen at the begin of the yr together with an enchancment in market sentiment in latest months may set the index on the proper observe. And any potential good news concerning the import tariff scenario and the economic system at any level in the coming months may offer additional catalysts.
But here is the best news of all: History exhibits us the S&P 500 all the time has superior over the long run. So, even when the S&P 500 does not make it to Lee’s goal by the finish of the yr, a buy of an S&P 500 tracker at the moment may offer you a main win down the highway.Should you invest $1,000 in Vanguard S&P 500 ETF proper now?Before you buy stock in Vanguard S&P 500 ETF, contemplate this:The Motley Fool Stock Advisor analyst staff simply recognized what they imagine are the 10 best stocks for buyers to buy now… and Vanguard S&P 500 ETF wasn’t one of them. The 10 stocks that made the cut may produce monster returns in the coming years.Consider when Netflix made this listing on December 17, 2004… for those who invested $1,000 at the time of our suggestion, you’d have $668,538!* Or when Nvidia made this listing on April 15, 2005… for those who invested $1,000 at the time of our suggestion, you’d have $869,841!*Now, it’s price noting Stock Advisor’s complete average return is 789% — a market-crushing outperformance in comparison with 172% for the S&P 500. Don’t miss out on the latest prime 10 listing, accessible if you be a part of Stock Advisor.
See the 10 stocks »*Stock Advisor returns as of June 2, 2025Adria Cimino has no place in any of the stocks talked about. The Motley Fool has positions in and recommends Vanguard S&P 500 ETF. The Motley Fool has a disclosure coverage.
The views and opinions expressed herein are the views and opinions of the creator and don’t essentially mirror these of Nasdaq, Inc.
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