The stock market will rise regardless of who wins the election as sidelined investors start buying again, Fundstrat's Tom Lee says

• Investors who have been on the sidelines because of Tuesday's presidential election will buy stocks and push the market higher as the uncertainty subsides, Fundstrat's Tom Lee said on Tuesday.
• "Investors have been on a buyers strike due to the uncertainty of election outcomes," Lee said.
• That buyers strike is likely to vanish this week and stocks are likely to go up regardless of the outcome of the election, even if the result is contested, Lee said.
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Anxiety about the 2020 US presidential election that's left some investors on the sidelines is finally set to end, helping to push markets higher through the end of the year, Fundstrat's Tom Lee said in a note on Tuesday.

Since October 12, stocks have staged a nearly 10% correction as rising COVID-19 cases, a lack of another fiscal stimulus deal, and election anxiety pushed some investors to the sidelines.

"Investors have been on a buyers strike due to the uncertainty of election outcomes," Lee said.

But that strike's set to end as Tuesday's election reduces market uncertainty, Lee said. And investors have plenty of cash sitting on the sidelines to put to work in the markets — nearly $4.5 trillion, Lee said, citing data from ICI.

This all sets the stock market up for a postelection rally, regardless of the outcome.

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Specifically, Lee said he expects a 10% rally if Joe Biden wins, with cyclical stocks leading and tech stocks lagging behind because of tax risks.

If President Donald Trump stages a surprise victory, however, Lee expects a 15% to 17% rally, as there would be less of a threat of more lockdown measures to quell the rise in virus cases. Lee also said a Trump victory could result in both cyclical and technology stocks leading the market higher.

A contested result would be a negative outcome, but it could still result in a 5% to 7% rally in stocks thanks to increased odds of stimulus and more easy monetary policies from the Federal Reserve, Lee said.

The best stocks to bet on in a postelection rally? Cyclicals, Lee said, citing tailwinds including fiscal stimulus, an easy Fed, a COVID-19 vaccine, and improved manufacturing data.

Read more: Stifel asked its analysts to identify stocks most likely to be positively or negatively affected by the election results. Here are the dozens of stocks to buy or avoid in each of the 3 outcomes.