2027 could be one of the best years for the stock market, says Fundstrat's Tom Lee

Summary

Fundstrat's Tom Lee predicts a strong August rebound for the S&P 500 to 7800, driven by rising earnings estimates and a recent leverage unwind, while maintaining a 10% drawdown forecast before a year-end close above 8000. He sees 2027 as a potentially outstanding year for stocks as macro clouds clear, and highlights cooling housing and wage inflation.

• Tom Lee expects a strong S&P 500 rebound in August, targeting 7800.
• The market is a coiled spring after earnings estimate increases and a large AI-related deleveraging event.
• A 10% drawdown is still expected this year, but the S&P 500 should close above 8000.
• 2027 could be one of the best stock market years as Fed uncertainty and geopolitical clouds lift.
• Declining home prices and muted wage inflation support his view of cooler inflation prints.
• The AI hedge fund unwind and Korean policy panic were recent sources of market turbulence.