One of Wall Street's biggest stock bulls reveals the level oil prices have to reach to derail his rosy forecast

• Oil prices surged on Monday amid the new Middle East conflict.
• Mike Wilson of Morgan Stanley sees $100 oil as a potential tipping point for stocks.
• That would put the year-over-year gain in oil prices in the 75%-100% range.

Oil prices are surging after the US and Israel attacked Iran this weekend, and one of Wall Street's top stock bulls is eyeing a key threshold that would derail his upbeat outlook for this year.

Brent crude, the international oil benchmark, jumped as much as 10% Sunday evening, paring that gain to 7% to trade at $78.30 on Monday. US oil was up 6%, trading at $71.31.

With energy prices poised to stay elevated, investors are grasping for answers about how the situation might affect the stock market.

According to Mike Wilson, Morgan Stanley's CIO and top stock strategist, crude would need to spike above $100 a barrel for the bull case to be upended. That would put oil's year-over-year gains in the 75%-100% range, which has historically marked a tipping point for stocks.

But until then, investors don't have to stress about how the oil picture might complicate the outlook, Wilson said.

"Historically, geopolitical risk events haven't led to sustained volatility for equities. In fact, 1/6/12 months post these occurrences, the S&P 500 has been up 2%/6%/8%, on average," Wilson wrote in a client note on Monday. "The bear case scenario for stocks related to this past weekend's events in Iran and across the Middle East would be if oil prices were to rise sharply/persistently, thereby posing a risk to the duration of the business cycle."

Wilson added that increases to crude prices so far are "modestly" positive.

"Thus, unless oil prices spike in a historically significant manner and remain elevated, recent events are unlikely to change our bullish view on US equities over the next 6-12 months."

Wilson shared a chart showing that US recessions have typically started when oil prices surge by 75%-100% year over year. When recessions strike, US consumers tend to pull back on spending, hurting corporate earnings and sending stocks lower

Further adding to Wilson's sanguineness is his stance that the US economy is early in a new business cycle. That means the economy is strengthening as earnings start to broaden out to cyclical parts of the market, leaving stocks less at risk to oil shocks than if the economy were in a late-cycle position.

The US and Israel struck several targets in Iran for a third day on Monday. The attacks on Saturday killed its Supreme Leader, Ali Khamenei.

The conflict has stoked fresh volitality in markets to start the week, with notable stock winners including shares of energy companies and defense firms, while airlines, hotels, and cruise lines saw their stocks tumble.