Is this a bull market, or just an illusion?

The S&P 500 has rebounded nearly 10% since the low on March 27, and the Nasdaq has seen ten consecutive days of gains, a record for the longest streak since 2021. Bitcoin has regained over $76,000, and cryptocurrency stocks have surged across the board. While everyone is still discussing whether the war will crash the economy, the market has quietly emerged from a beautiful V-shape.

This time, has the bull market truly returned, or is it just a rebound? There are also many differing views among top strategists on Wall Street.

Optimists: The bottom has been confirmed

Tom Lee is one of the most steadfast bulls in this rebound. In a CNBC interview, he stated that the US-Iran ceasefire agreement has eliminated the possibility of large-scale bombing operations, meaning that the bottom for US stocks has "been established." His logic is straightforward: if the S&P 500 can re-establish itself above the 200-day moving average, the market is likely to experience a "decisive upward breakout."

Senior strategist Ed Yardeni's assessment is even more direct. He maintains that the S&P 500 hit a bottom on March 30, with a year-end target of 7,700 points, implying about an 11% increase from current levels. He remarked to Fortune magazine, "Pessimism is now outdated." He even acknowledged that there are so many bulls that it makes him a bit uneasy.

Next, let’s look at Goldman Sachs’ judgement.

They characterize the current stage as a "marathon-style expansion," transitioning from large tech stocks leading the charge to a broad rotation into cyclical and industrial stocks. Their year-end target remains at 7,600 points, justified by a 12% earnings growth per share constituting a "fundamental bottom," which can limit downside even amid macro fluctuations. Goldman Sachs' global chief equity strategist Peter Oppenheimer further stated in a report on April 7 that there may be undervaluation opportunities in US tech stocks currently, with AI investment spending expected to contribute approximately 40% of the S&P 500's earnings growth.

The earnings season is also trending in this direction. FactSet predicts a 13.2% year-on-year profit growth for the first quarter, and Barclays has raised its full-year earnings forecast for 2026 to $321 per share. Analysts had previously lowered their expectations; now the classic "low expectations, high realization" combination has formed, which historically tends to ignite the next wave of upward movement.

Morgan Stanley's views are highly aligned with Goldman Sachs. Morgan Stanley pointed out that historically, bull markets usually last five to seven years, and bull markets that are four years in have historically generated positive returns every time. They believe that the AI-driven productivity revolution has not truly spread beyond large tech stocks yet, and once this spread occurs, it will inject new fuel into the bull market.

Bearish factions have a different opinion

But not everyone is celebrating.

Michael Hartnett, chief investment strategist at Bank of America, is the loudest bear voice in this debate. In March's global fund manager survey, Hartnett pointed out that the current market positioning indicators "are far from the super bear market levels seen at significant recent lows." He compared four historical market lows: the tariff shock in April 2025, the Russia-Ukraine war, the COVID collapse, and the US debt downgrade in 2011. In each case, market indicators were more extremely pessimistic than now. His conclusion is that the true bottom often occurs only after a genuine capitulation, which has not yet happened.

Specific data supports his caution: institutional investors still have a 37% overweight in stocks; the cash ratio is only 4.3%, well below the 5% buy signal threshold; market breadth is still positive. Historically, on every real bottom, these three indicators pointed in a different direction.

He also highlighted a more pessimistic comparison: between 2007 and 2008, oil prices skyrocketed from $70 to $140 while the subprime crisis was quietly building beneath the surface. Since the outbreak of the Iranians War, oil prices have risen over 60%. Hartnett believes that the damage to corporate profits from this surge is more immediate and deeper than the inflation data itself.

Additionally, Goldman’s own trading desk has expressed different views. Rich Privorotsky, head of Goldman’s Delta One business, is more cautious: if oil prices remain above pre-war levels, this rise resembles a technical rebound due to short covering rather than a trend worth chasing. He stated that the ultimate judge of the market has only one standard: the actual tanker traffic in the Strait of Hormuz, which will take time to validate.

Piper Sandler's chief investment strategist Michael Kantrowitz takes a more extreme stance. He states that the uncertainty has been extremely high over the past five years, causing investors to become very short-sighted, and consensus shifts often require very few triggering factors. Because of this, he has simply stopped issuing year-end target prices for the S&P 500.

Where the real divergence lies

Overall, bulls believe this is a sequel to a bull market supported by fundamentals: corporate profits are increasing, AI-driven productivity improvements are genuinely occurring, and the easing of geopolitical risks from the ceasefire is releasing the previously suppressed valuation space.

Bears, on the other hand, view this as a technically driven rebound led by emotional repair: short covering has driven up the indices, war risks are merely temporarily set aside rather than eliminated, and real funds have not seen massive inflows. In the past week, bond funds saw inflows of $17 billion, money market funds $10 billion, and gold saw the largest single-week inflow since October 2023, while stock funds experienced net outflows of $15.4 billion.

Moreover, there is one variable that everyone cannot avoid: the progress of negotiations between the US and Iran. The ceasefire deadline is April 22, and the second round of talks has yet to reach an agreement. Although there has been some improvement in commercial vessel traffic in the Strait of Hormuz, it is still only a small fraction of pre-war levels. Barclays has explicitly warned that if oil price shocks continue, the S&P could fall to 5,900 points in the worst-case scenario.

We are all waiting for an answer. Trump said "it's nearing the end," oil prices fell 4%, and global stock markets opened higher. But "nearing the end" does not mean it is already over.

Those who believe in good outcomes must be pleased to see such developments: an extension of the ceasefire, a swift conclusion of negotiations, falling oil prices, and earnings exceeding expectations. This wave of rebound will be recorded in history as the new starting point of a bull market. The pessimists may take Hartnett's words as truth: "Investors should not mistake a relief rebound for a resolution of the issues."

What do you think?

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