The stock market may "trend sideways" into the end of the year before resuming its skyward trajectory, James Paulsen, chief investment strategist at Wells Capital Management, told CNBC on Monday.
"I don't see a thing that will end this bull market," Paulsen said in a "Squawk Box" interview. But "the market will digest a number of things the rest of the year," he continued, such as a reevaluation of bond yields.
"Next year, we will resume this bull [in stocks] and make another run," he predicted, while cautioning about a temporary pause, "a correction by time if you will."
Stock are still near record highs, despite recent volatility. In the past 30 days, the S&P 500 Index and the Dow Jones Industrial Average added only about 1 percent to their now 16 percent gains for the year to date.
"We will find ourselves at 1,700 [on the S&P] at different times the rest of this year," he continued. "If we're around the 1,700 level, I'd be a little more cautious about committing capital unless you are just woefully underallocated" in stocks.
"I think what we really haven't had in this entire bull run [in stocks] of the last four years is real pain introduced into the bond market," Paulsen observed.
In the past two months, the yield on the 10-year Treasury has spiked 22 percent to around 2.2 percent.
"The rest of this year, the 10-year yield ends up closer to 3 percent than 2" percent, Paulsen said. "If it does that, you really create not just underperformance by bondholders, [but] real losses."
He also said he believes that trend will spill over to "bondlike stocks … high-dividend payers, not just utility stocks, which we're seeing getting hammered as the bond yields have moved up the last month."
"It might be the [S&P 500] Dividend Aristocrats Index that could get hit pretty hard," he concluded.
The index tracks blue-chip companies with a track record of increasing dividends every year for at least 25 consecutive years.