Dec '25 • General discussion
Tom Lee (Fundstrat) - some thoughts on 2026
Here’s a concise summary of Tom’s 2026 outlook based on the transcript (targets + what he implies are the best places to be):
- S&P 500 target: ~7,700 for 2026 (he frames it as a ~10% year, assuming the S&P ends the prior year around ~7,000).
- Shape of 2026: Very turbulent—he repeatedly suggests it could feel like a bear market at some point (even referencing a potential ~20% drawdown), but finishes strong into year-end.
Core volatility catalysts:
- A new Fed chair (markets “test” the new chair; confirmation can take ~90 days).
- Possible tariff turmoil if the Supreme Court overturns tariffs, creating policy uncertainty and business visibility issues.
- Big bullish tailwind by year-end: the “Fed put” returning (and effectively a “White House put” too), with policy bias toward easing once the transition drama passes.
- Leadership call: Tech/AI may stall/digest gains early, which can spook sentiment—but he thinks the market can still work if breadth improves (rotation rather than leadership ending).
- “Best investments” implied (themes/areas): position for broadening beyond mega-cap tech—he highlights strength/response in small caps, equal-weight/broader market participation, and financials (and he wants housing + ISM to turn up as confirmation).
- Key risk to watch: valuations + AI bubble fears + policy uncertainty—these can drive sharp swings even in a bullish year-end outcome.
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Tom Lee (Fundstrat) - some thoughts on 2026
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