Don't rush to celebrate! "Wall Street Oracle": Uncertainty still exists before the election

Renowned Wall Street bull Tom Lee has long predicted a significant stock market rally after the Fed cuts interest rates, but he now claims to remain cautious ahead of the November election. The S&P 500 and Dow hit new highs on Thursday, a day after the Fed cut rates by 50 basis points. The Fundstrat Global Advisors research director said on CNBC's "Squawk on the Street" on Thursday, "The Fed's rate cut cycle is laying the foundation for a truly strong market trend in the next month or three." However, he added that as the November U.S. presidential election approaches, he is not entirely convinced that the stock market will continue to rise. He said, "I think there is still a lot of uncertainty in the market from now until election day. That's why I'm a bit hesitant about whether investors should enter the market." With less than 100 days until the U.S. election, there is uncertainty surrounding the economic policies of both candidates, causing some investors to hesitate before heavily betting on certain stocks and industries. In the days leading up to the Fed policy meeting, Lee had said that the rate cut would bring weeks of gains to the stock market as people would be more confident that the Fed would further cut rates and the economy would achieve a soft landing. Nevertheless, Lee also acknowledged that there would be volatility in the market before the election, but it would calm down after the election to welcome a strong year. He has been bullish on the stock market for years and predicted that the S&P 500 could double by 2030, reaching 15,000 points. Other analysts also acknowledge that the presidential election will cause market fluctuations. Liz Young Thomas of the U.S. online personal finance company SoFi stated earlier this month that this volatility typically peaks in mid-October before the November election, and once the election results are announced, the stock market will rebound. As election-related volatility approaches, Lee recommends investing in cyclical stocks such as industrials, financials, and small caps. Small caps will particularly benefit from rate cuts and Lee's "cyclical economic stimulus," which will stem from the decline in consumer costs such as mortgages, auto loans, and credit cards. He said, "All of these are huge positives for small caps." Lee is jokingly referred to as the "Wall Street Oracle" for correctly predicting the stock market boom in 2024 and making several bold short-term forecasts. He was also one of the first on Wall Street to turn bullish on the stock market during the COVID-19 pandemic. Earlier this month, he pointed out that U.S. stocks could fall by 7% to 10%