Fundstrat's Tom Lee told CNBC the S&P 500 can grind to 8,000 by year-end, with upside toward 8,800. He expects that climb only after a 10-20% drawdown between August and October, and attaches 60% odds to the roadmap.
Fundstrat's Tom Lee sees the S&P 500 reaching 8,000 by year-end and possibly 8,400 to 8,800, but he told CNBC's Squawk Box on July 6, 2026 that a summer-into-fall slide would likely come first. He put the potential drawdown at 10-20%, possibly between August and October.
With the index trading at 7,537 on July 6, the S&P 500 has already returned 9.22% year-to-date and 20.04% over the past year. Lee argues the market is cheaper now than in January despite the rally, because earnings have grown.
Why Lee Sees 8,000 as Doable
Lee's target rests on 2026 earnings near 400 and a multiple in the 20x-22x range. According to 24/7 Wall St., Lee said: "8,000 is doable this year" because that level would be roughly 20 times 2026 earnings, with 8,400 or 8,800 the upside into year-end.
He has also lifted his 2027 earnings estimate to 400 from 350 at the start of the year. J.P. Morgan Asset Management's 2026 outlook pegs S&P 500 earnings growth at 11% in 2025 and 13% in 2026, with Magnificent 7 profit growth around 20%.
The Pullback He Expects First
But Lee warns investors could face something that might feel like a bear market, not in July but maybe between August and October. He noted that only 23% of fund managers are beating the large cap growth index, the lowest in almost five years.
The macro backdrop is uneven. University of Michigan consumer sentiment collapsed to 44.8 in May 2026. GDP growth whipsawed from 4.4% in Q3 2025 to 0.5% in Q4, then back to 2.1% in Q1 2026.
Four Risks and a 60% Bet
Lee flagged four triggers for a pullback: the market testing the new Fed framework, a gradual unlock of SpaceX shares, a cumulative shortage of petroleum products, and elevated margin debt. The Federal Funds target upper bound sits at 3.75%, down from 4.5% in September 2025, while Core PCE stays in the 90.9th percentile of the last 12 months.
Lee attached a roughly 60% probability to his roadmap and views any 10% to 20% drop as a temporary correction within a longer-term bull market, not the start of a prolonged downturn.
Source: 24/7 Wall St.
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