Is this a bull market, or just an illusion?
The S&P 500 has rebounded nearly 10% from its March 27 low, while the Nasdaq has recorded ten consecutive days of gains, marking its longest winning streak since 2021. Bitcoin has climbed back above $76,000, and crypto-related stocks have surged across the board. Just as everyone was still debating whether the war would cripple the economy, the market has quietly staged a beautiful V-shaped recovery.
Has the bull market truly returned this time, or is this just a rebound? Top Wall Street strategists are deeply divided.
The Bulls: The Bottom Is In
Tom Lee is one of the most steadfast bulls in this rally. In an interview with CNBC, he stated that the U.S.-Iran ceasefire agreement eliminates the possibility of large-scale bombing campaigns, meaning the "bottom has been established" for U.S. stocks. His logic is straightforward: if the S&P 500 can reclaim its 200-day moving average, the market will likely experience a "decisive upward breakout."
Veteran strategist Ed Yardeni's judgment is more direct. He maintains his view that the S&P 500 bottomed on March 30, with a year-end target of 7700 points, implying an approximate 11% gain from current levels. He told Fortune magazine something intriguing: "Pessimism is now out of fashion." He even admitted that the sheer number of bulls makes him slightly uneasy.
Now, consider Goldman Sachs's assessment.
They characterize the current phase as a "marathon expansion," with leadership rotating from large-cap tech stocks to a broader range of cyclical and industrial stocks. Their year-end target remains 7600 points, citing 12% earnings per share (EPS) growth forming a "fundamental bottom" that can limit downside even amid macroeconomic volatility. In a report on April 7, Goldman Sachs's Global Chief Equity Strategist Peter Oppenheimer further stated that U.S. tech stocks may currently present a discount buying opportunity, with AI investment spending contributing about 40% of the S&P 500's EPS growth.
The earnings season is also leaning in this direction. FactSet predicts first-quarter earnings grew 13.2% year-over-year, while Barclays raised its full-year 2026 EPS forecast to $321. Analysts had previously broadly lowered expectations, and now the classic "low expectations, high delivery" combination is in place, which historically has often been the igniter for the next wave of gains.
Morgan Stanley's view is highly consistent with Goldman's. Morgan Stanley points out that bull markets historically last five to seven years, and bull markets in their fourth year have *every time* in history delivered positive returns. They argue that the AI-driven productivity revolution has not yet truly diffused beyond large-cap tech stocks, and once this diffusion occurs, it will inject new fuel into the bull market.
The Bears Disagree
But not everyone is celebrating.
Bank of America's Chief Investment Strategist Michael Hartnett is the loudest bearish voice in this debate. In the March Global Fund Manager Survey, Hartnett noted that current market positioning indicators are "nowhere near the super-bearish levels seen at recent major lows." He compared four historical major bottoms: the April 2025 tariff shock, the Russia-Ukraine war, the COVID crash, and the 2011 U.S. debt downgrade. Each time, market indicators were far more extremely pessimistic than they are now. His conclusion: true bottoms often occur after true capitulation, and that moment has not yet arrived.
Specific data supports his caution: institutional investors are still 37% overweight stocks; the cash level is only 4.3%, well below the 5% buy signal threshold; and market breadth remains positive. At every true major bottom in history, these three indicators pointed in the opposite direction.
He also pulled out an even more pessimistic data comparison: between 2007 and 2008, oil prices rose from $70 to $140, while the subprime mortgage crisis was quietly building beneath the surface. Since the outbreak of the Iran war, oil prices have surged over 60%. Hartnett believes the actual damage of such a rise to corporate profits comes earlier and deeper than the inflation data itself.
Furthermore, a different voice emerged from Goldman's own trading desk. The judgment from Rich Privorotsky, head of Goldman's Delta One business, is more cautious: if oil prices remain persistently above pre-war levels, this rally looks more like a technical rebound fueled by short covering rather than a trend worth chasing. He said the market's ultimate arbiter is only one thing: the actual flow of oil tankers through the Strait of Hormuz, and this data needs time to verify.
The stance of Piper Sandler's Chief Investment Strategist Michael Kantrowitz is more extreme. He stated that the past five years have been highly uncertain, making investors very short-sighted, and consensus views can often shift with very few triggers. Because of this, he has simply stopped publishing a year-end target price for the S&P 500.
Where the Real Divergence Lies
Overall, the bulls believe this is a fundamentally supported sequel to the bull market: corporate profits are growing, AI-driven productivity gains are real, and the easing of geopolitical risks due to the ceasefire is releasing valuation space previously suppressed.
The bears, however, see this as an emotionally driven technical rebound: short covering has pushed indices higher, war risks have been temporarily shelved rather than eliminated, and real money hasn't flowed in en masse. In the most recent week, bond funds saw inflows of $17 billion, money market funds took in $10 billion, gold recorded its largest weekly inflow since October 2023, while equity funds experienced net *outflows* of $15.4 billion.
Furthermore, there is one variable no one can ignore: the progress of U.S.-Iran negotiations. The ceasefire deadline is April 22, a second round of talks has yet to yield an agreement, and commercial shipping traffic through the Strait of Hormuz, while improved, remains a fraction of pre-war levels. Barclays explicitly warned that if the oil price shock persists, the S&P 500 could fall to 5900 points in a worst-case scenario.
We are all waiting for an answer. Trump said they are "close to the end," oil fell 4%, and global stocks opened higher. But "close to the end" is not the same as over.
Those inclined to believe in a good outcome will surely be pleased to see this follow-through: the ceasefire holds, a deal is reached swiftly, oil prices retreat, earnings exceed expectations, and this rebound will be recorded in history as the new starting point of the bull market. Those less optimistic might hold Hartnett's words as the true mantra: "Investors should not mistake a relief rally for problem resolution."
What do you think?
