Tom Lee Wants a 10% Crash Before S&P 500 Hits 8,000, Bitcoin Already Had One

Fundstrat's Tom Lee expects the S&P 500 to reach 8,000 by the end of August. He also expects a 10% correction, and he argues the market would be better off getting one.

Lee made the case on CNBC after a mild July inflation print lifted stocks to fresh records. Crypto investors watching from a $63,000 Bitcoin may find the argument uncomfortably familiar.

Why Tom Lee Wants a Correction Before Stocks Reach 8,000

Conditions look close to ideal for equity bulls. July consumer prices rose 0.1% on the month and 3.4% on the year, matching forecasts. Core inflation landed at 2.5% annually.

That print followed a weak July jobs report. Together they cut the odds of a September Federal Reserve rate hike to roughly 40%. The S&P 500 closed at a record on August 12, but Lee has not softened his target.

"I think the rally is quite healthy and it's tracking to our view that we could get to 7,900, 8,000 by the end of the month," Tom Lee, head of research at Fundstrat Global Advisors, speaking on CNBC.

The math behind that runs through earnings. Lee said 2027 estimates have climbed from about $395 at the start of reporting season to roughly $410 now. A 20 times multiple on $425 would point near 9,000.