Tom Lee explains what the stock market is telling us about Israel-Palestine war

S&P 500 ended comfortably in the green on Monday even after Israel ordered a “complete siege” of the Gaza Strip in response to the surprise attack that Hamas launched on it over the weekend.

Tom Lee shares his view on the stock market

A full-blown war in the Middle East does add to uncertainty surrounding the stock market particularly since such conflicts tend to be inflationary as Invezz reported here.

Still, Tom Lee – the co-founder of Fundstrat Global Advisors is not overly concerned about the impact these geopolitical tensions may have on the benchmark index.

Stock market reaction is telling us that they are viewing conflict as ultimately limited in time and scope. If there was a bigger sell-off, I’d think market was smelling something more dangerous and engulfing.

The Israel-Palestine war has claimed over 1,300 lives in three days.   

🇵🇸🇮🇱 HAMAS STATEMENT

“Hamas is threatening to execute 1 captured Israeli for every civilian house bombed without pre-warning.”

(via Channel 4 News UK 🇬🇧) pic.twitter.com/xNIF8IvIre

— Censored Men (@CensoredMen) October 9, 2023

Lee sees the increase in oil prices today as muted

Oil prices did push to the upside on Monday – but the move, as per Lee, wasn’t significant enough to build a downside case for equities, particularly as oil demand is “quite week”.

On CNBC’s “Squawk on the Street”, the Fundstrat expert also said that it was conceivable for the U.S. Federal Reserve to consider a pause and not lift rates any further which may mean a much-awaited lifeline for the stock market.

The Bureau of Labour Statistics is scheduled to publish its next inflation report (monthly) on Thursday. Ahead of it, the benchmark index is up nearly 14% year-to-date.  

Ruchir Sharma of Rockefeller International also took a positive tone on stocks today despite the Israel-Palestine conflict.