Tom Lee Says Mag-7 Bear Market Is Over, But Trouble Is Brewing For Rest Of Wall Street: 'Day Of Reckoning'

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Tom Lee Says Mag-7 Bear Market Is Over, But Trouble Is Brewing For Rest Of Wall Street: 'Day Of Reckoning' Rishabh Mishra Tue, May 26, 2026 at 5:31 PM CDT 7 min read AAPL MSFT NVDA Benzinga and Yahoo Finance LLC may earn commission or revenue on some items through the links below. Fundstrat's Head of Research, Tom Lee , is warning investors that while Big Tech — including Apple, Microsoft, Nvidia and other Mag-7 companies — is out of the woods, a targeted “rolling bear market” is heading for other areas of Wall Street later this year. While Lee expects the broader market to show resilience into year-end, driven by “unrelenting demand” for artificial intelligence (AI), he believes the gains will not be evenly distributed. Clarifying his outlook on prominent tech equities on CNBC, Lee stated, “I think we’ve already had a bear market in Mag-7 and software.” While those high-flying sectors are expected to remain safe, the same cannot be said for the broader market. “I think there’s going to be a bear market in other stocks later this year,” Lee warned, pointing to headwinds that will squeeze companies that “got lofty.” A single bad hire can set a startup back years. Here are the 5 hires founders most often misjudge — and why Still Learning the Market? These 50 Must-Know Terms Can Help You Catch Up Fast According to Lee, the market is poised to confront three primary hurdles as the year progresses: typical midterm seasonal volatility, a looming supply overhang from upcoming tech IPO lockup expirations, and a critical energy crunch. It is the severe energy bottleneck that Lee flags as the most immediate danger for the broader economy. “There is a day of reckoning coming because the inventory of petroleum products is short and not being alleviated anytime soon,” Lee cautioned. Consequently, companies sensitive to these energy shortages are expected to bear the brunt of the downturn. Despite the warning, Lee remains heavily bullish on the underlying drivers of the U.S. economy—specifically energy independence and AI productivity. For now, investors are staying focused on near-term earnings. “In the meantime, I think investors are focusing on AI fundamentals,” Lee noted, adding that the “stocks that are working are the ones that are selling something that’s scarce.” While semiconductors could eventually approach bubble territory, Lee advises that the current momentum belongs to AI suppliers and Big Tech, while the rest of Wall Street faces an impending winter. 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Tom Lee believes the bear market for the Mag-7 is over, but warns of impending trouble for the rest of Wall Street, indicating a deepening market polarization.

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