Tom Lee Says 'We Are at the Bottom' as Tech Sell-Off Rocks Markets — But He Still Sees S&P 500 Above 8,200 By Year-End

Fundstrat’s Tom Lee believes the stock market has hit a bottom following the recent decline in tech stocks, maintaining his target for the market to finish the year above 8,200 amid resilient artificial intelligence demand.

Tech Sell-Off and AI Demand

Addressing the recent tech sell-off, Lee indicated that the downward trend has concluded. “I think we are at the bottom,” he said. Lee emphasized that the underlying fundamentals remain strong for the tech sector, specifically noting that “the market for AI is still very tight.”

"I think we are at the bottom," says Tom Lee of @Fundstrat of the recent tech sell-off. "The market for AI is still very tight." https://t.co/2gl2pKuuqe pic.twitter.com/AFDLVLH8o1

— Squawk Box (@SquawkCNBC) November 2, 2026

Climbing a Wall of Worry

During a CNBC appearance, anchor Joe Kernen noted the Nasdaq 100 lost 3% last week; Lee reaffirmed his conviction that “markets are going to exit the year strong.”

He acknowledged that underlying market performance has been a “real battle” due to investor nervousness surrounding war, AI spending, debt markets, the Federal Reserve, inflation, and the midterms.

However, Lee noted that “markets climb a wall of worry” and expects that resolving these issues will help “see money come off the sidelines.”

Midterms as a Clearing Event

Lee identified the upcoming midterm elections as a key “clearing event.” He explained that markets often prefer political gridlock because “you don’t have too much policy creep,” making the presidential veto highly important.

While investors worry about data center regulations if Democrats win Congress, Lee offered a “contrarian view that House Democrats will support AI post-midterms because it does bring money to their community,” adding that AI is “good for jobs and it’s good for the economy.”

Prediction Markets and Polling

Comparing the 2026 midterms to the 2024 cycle, Lee observed that current prediction markets and polls are “almost the same,” with both basically showing a Democratic sweep.

Consequently, he stated they are not “generating signal on the margin.” Because the prediction platforms and polling data are so heavily aligned, Lee concluded that “the bigger surprise would be Republicans doing better.” However, he noted hearing that Texas could emerge as a state where Republicans fare better than expected.

How Has the Stock Market Performed?

The S&P 500 index has advanced 9.96% year-to-date. Similarly, the Nasdaq Composite index was up 8.30%, and the Dow Jones gained 7.44% YTD.

On Monday, the SPDR S&P 500 ETF Trust (NYSE:SPY) and Invesco QQQ Trust ETF (NASDAQ:QQQ), which track the S&P 500 and Nasdaq-100, respectively, closed mixed. SPY fell 0.48% to $752.10, while QQQ declined 1.36% to $681.09. Meanwhile, the Dow tracker, State Street SPDR Dow Jones Industrial Average ETF Trust (NYSE:DIA), ended 0.43% higher at $519.34.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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