The stock market saw a significant rise in April. S&P 500 and Nasdaq reached new highs this week, and have now erased all losses resulting from the US conflict with Iran.

BitMine chairman Tom Lee believes the US stock market is now stronger than at the previous peak earlier this year. He presented three reasons for his view during a segment on CNBC's Closing Bell.

The US stock markets absorb oil shocks

According to market data, the S&P 500 closed at 7 022,95 on April 15, surpassing the previous record set on January 28. Nasdaq ended at 24 016, marking a new record.

This rise came after the S&P had fallen as much as 9% from the peak in January, while the war created turmoil in global markets. Now both indices have gone into positive territory for the year after significant losses in March.

Lee pointed out the resilience as evidence that American stocks can withstand oil price spikes that hit other economies hard. Oil rose above $100 a barrel after the Strait of Hormuz was blocked.

However, prices have since fallen back as markets have become cautiously optimistic that tensions between the U.S. and Iran are beginning to ease.

“I know it may sound different than many believe, but I think the stock market is stronger today than earlier this year when we reached the previous peak, because first of all, we now see that the American stock market can withstand an oil shock, while it affects other countries,” Lee stated.

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Hans' other points dealt with corporate earnings. Lee pointed out that earnings have increased since the conflict started, which gives the market faith that the war is actually stimulating the American economy instead of dragging it down.

“Stocks are holding up because the economy is actually doing better despite this war. I know it sounds contradictory, but part of the explanation is defense spending, at $30 billion a month. And that could end up being $60 billion a month. It actually provides good stimulus to the economy. This $20 increase in oil prices adds only about $12 billion extra a month to household expenses. So the net effect is that the war is actually helping earnings right now,” Lee said during another segment on CNBC.

Lee's third argument is about the consensus that rising oil prices will trigger a severe inflation shock.

“When we look back at historical oil price spikes, the effect on core inflation has been less than we thought. So I believe the inflation shock will be smaller than expected,” argued the leader.

He maintains an S&P 500 target of 7,300 for the year, suggesting further upside of about 4% from current levels.

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