Just caught an interesting take from Tom Lee on CNBC about why markets are holding up better than people think. His angle is pretty straightforward—war, counterintuitively, might actually be a net positive for the economy right now.

Here's the math he laid out: Defense spending is running around 30 billion monthly, potentially doubling to 60 billion down the road. That's serious stimulus. Meanwhile, oil prices climbing 20 bucks per barrel? That's only adding roughly 12 billion in household costs. The net effect? Corporate margins actually expand. Tom Lee sees this as a historical pattern—he points to WWII as a reference point. The stock market bottomed in May 1942, just five months after the U.S. entered the war, when American troops hadn't even landed in Europe or the Pacific yet.

What's wild is Tom Lee's observation about market efficiency. He argues the market is already pricing in favorable outcomes before we even understand the mechanics. The current rally isn't random—it's the market digesting results in advance, even if we can't articulate exactly why.

On the three major variables shaping markets right now—Iran escalation, corporate earnings, and rates—Tom Lee emphasizes that war is the wild card. It's the only variable that can create tail events in multiple directions simultaneously, which makes it the critical one to monitor.

From a sector angle, Tom Lee remains constructively bullish on energy. Energy security is becoming one of the dominant structural themes, and that positioning looks set to persist.