Stock Market Poised for a Sharp Rebound in April, Says Tom Lee

A strong rebound in the stock market this April seems highly likely, according to Fundstrat's head of research, Tom Lee.

Optimism for a sharp rebound in the stock market this April seems highly likely, according to Fundstrat’s head of research, Tom Lee.

Speaking in a recent interview, he pointed to historical trends that suggest a swift recovery is on the horizon.

One observation Lee highlighted was past market behavior, particularly events in early 2018. That period saw a sudden rise in the VIX (volatility index) and a stock market decline, likely fueled by a drop in investor sentiment and confidence.

However, despite the pessimistic outlook, the market quickly bounced back, a pattern Lee believes is unfolding again now.

He also noted that a significant amount of cash—around $850 billion—has been moved into money market funds over the last year. In previous cycles, such large cash reserves have often flowed back into equities, fueling rallies.

Looking further into the year, he referenced past tax reforms that helped drive stock gains in 2017, suggesting that similar economic catalysts could support a bullish trend.

With much of the recent panic already playing out, Lee is confident that stocks will regain strength in early April. He sees the conditions as ripe for a V-shaped recovery—a pattern where markets rapidly reverse from losses to strong gains.

The downturn earlier this month, which impacted both stocks and crypto, followed Donald Trump’s announcement of tariffs and his reluctance to dismiss the possibility of a recession.

However, if history repeats itself, Lee believes the market could be on the verge of a sharp turnaround.