Wall Street expert warns: Market 'digestion period' is coming, there will be a big market trend after the US midterm elections Odaily Planet Daily News - Fundstrat strategist Tom Lee said in an interview with CNBC that the current market is in a cycle that may be divided into three stages, with the second stage potentially experiencing a bear market like correction. Lee has long been known for his bullish stance and has successfully judged bull market trends multiple times in the past few years. However, this time he believes that the market trend will not be smooth sailing in the short term. As of early June, the S&P 500 index has risen nearly 11% this year, despite facing challenges such as doubts about the prospects of artificial intelligence at the beginning of the year and the Iran war pushing up energy prices and inflationary pressures. Lee pointed out that significantly better than expected corporate profitability is a key factor driving market growth. Previously, the market generally expected earnings per share (EPS) for the first quarter to be around $70, but the actual data was around $80. He stated that if this trend continues, it will result in an additional earnings per share of approximately $40 for the year, theoretically driving the S&P 500 index up another 800 to 1000 points. According to Lee's judgment, the first stage still leans towards an upward trend. At present, the S&P 500 index is slightly above 7560 points on June 3, 2026, and he believes that there is still room for short-term upward movement, which may rise to about 7700 points. The second stage may arrive soon and become the "digestion period" of the market. Lee said in a CNBC interview, "Between now and October, the market will need to digest multiple factors." He cited sources of pressure including policy uncertainty brought by the new Fed chairman, energy shocks (especially shortages of oil products and lubricants), and additional stock supply from IPOs and their lifting of restrictions for companies such as SpaceX, OpenAI, and Anthropic. (Golden Ten)