Tom Lee: Markets are overreacting to the Fed and I would be a dip buyer

Summary

Tom Lee and Dan Greenhaus joined Closing Bell to discuss the Fed decision and the market's negative reaction. Tom Lee argued the hike was priced in, the economy can handle it, inflation should fade, and investors should buy the dip, especially in beaten-down sectors. Dan Greenhaus said the Fed did not need to hike but a 25-basis-point move is not catastrophic, while flagging weakness outside AI/data-center investment and in construction.

• Fed hiked and markets sold off; guests debated whether the reaction was overdone.
• Tom Lee said he would buy the dip because the Fed hike does not derail a strong economy and earnings revisions are still rising.
• Tom Lee expects temporary inflation effects to fade and core PCE to fall to a two-handle.
• Tom Lee favors cyclicals, technology, consumer discretionary, and financials if inflation fears ease; he called the financials selloff overdone.
• Dan Greenhaus said the Fed did not need to hike, but 25 basis points is not a reason to flee.
• Dan Greenhaus flagged weakness in residential and non-residential construction, worsened by higher rates.
• Dan Greenhaus noted consumer strength and AI investment's large contribution to GDP growth.
• Post-headline market moves may be amplified by algos.