Top analyst calls 'kick in the pants' for S&P 500

Following its Oct. 24 close, the S&P 500 index is parked near 6,792, up on the week and continuing to flirt with record highs. Its three-month gain is also at a superb 8%, while the six-month trend stays clean and green.

The recent spark has everything to do with the September CPI report, which cooled to 3% year over year, a shade softer than forecast.

Additionally, the Core CPI matched it at 3%, while monthly headline inflation numbers increased to just 0.3%. At the same time, shelter costs eased, even as gas prices nudged up, giving the Fed some much-needed breathing room.

Now all eyes are on another interest rate cut, after the Fed already cut once in September, and will perhaps cut even more before year-end. Wall Street sees it, and stocks are leaning in.

However, here’s where it gets interesting. Veteran market watcher in Fundstrat’s Tom Lee has a sharper-than-usual take on this setup,  which could potentially be the ‘kick in the pants’ the bulls didn’t know they were waiting for.Fundstrat’s Tom Lee sees the S&P 500 setting up for a stronger-than-expected year-end rally as cooling inflation and Fed cuts align.TheStreet

Tom Lee says S&P 500’s year-end setup looks stronger

Even after a 15% year-to-date bump, Fundstrat’s Tom Lee feels the stock market still has plenty of room to run.

Speaking on CNBC, the longtime bull stated that the S&P 500 could easily push past 7,000 by year-end, and perhaps much higher, especially if the Fed’s recent pivot keeps the ball rolling.

“We could do far better than 4%, maybe even 10% into year-end,” Lee told CNBC, highlighting that the power-packed combo of new rate cuts and fading skepticism is setting the stage for a late-year run.

More Experts

Dave Ramsey, AARP sound alarm about Social Security JP Morgan CEO issues blunt warning on auto industry bankruptcies In rural areas, lack of transport hinders access to health care

It’s not just stocks that are flashing green.

Bitcoin has regained the $110,000 level and has Lee seeing crypto and stocks moving in tandem again. After what he called the “biggest liquidation event in five years,” the Fundstrat co-founder feels both market bellwethers in Bitcoin and Ethereum are showing positive technicals.

Lee feels the current stock market setup is in line with other “reset” years, when the Fed cut late in the cycle (1998 and 2024), and both times the market finished strong. “The S&P’s already at 6,800,” he added, “and that’s before the usual year-end rally even begins.”

Wall Street’s big names can’t agree on how high is high

The bulls are talking louder than ever about the stock market,  but the bears haven’t left the room, either.

With the S&P 500 hovering near the 6,800 mark, Wall Street’s leading voices are splitting into two camps.

Story continues

Some believe there’s a clear runway to 7,000 and beyond, spearheaded by Fed cuts and AI-driven earnings strength. Others feel the market’s “been here before” and may use a good shakeout.

Related: Palantir just signed deal that could shift AI power balance

The past couple of months have seen a flurry of target revisions, and the spread between the high and low calls has gotten a lot wider than it’s been all year.

For instance, Deutsche Bank, Goldman Sachs, and HSBC have raised their sights on the back of cooling inflation and corporate profit resilience. Additionally, Fundstrat’s Tom Lee remains one of the Street’s loudest bulls.

On the flip side, Morgan Stanley’s Mike Wilson isn’t buying into the euphoria, arguing that earnings expectations look “too rosy.” Similarly, UBS echoes a similar caution, holding its year-end view near 6,100, even after modest upgrades.

Summary of the latest S&P 500 calls:

Bulls:

Tom Lee (Fundstrat): 7,000 Deutsche Bank: 7,000 Goldman Sachs: 6,800 Citi: 6,600 HSBC: 6,500 BofA (12-mo): 7,200

Bears/Cautious:

Morgan Stanley: 6,500 base, -10% to -15% downside risk UBS: 6,100 (EPS $275 for 2025)

Related: Legendary analyst has stunning take on stock market

This story was originally reported by TheStreet on Oct 27, 2025, where it first appeared in the Investing section. Add TheStreet as a Preferred Source by clicking here.

View comments