Tom Lee: SPX to hit 8000 first, then watch out for a 10% pullback, but this bull market isn’t over in the long term. Tom Lee remains bullish on U.S. stocks, believing that with moderate inflation and strong earnings reports, SPX has a chance to push toward 8000 by the end of August. The most important support is still earnings. The S&P 500’s 2027 EPS forecast has been revised up from around 395 at the start of earnings season to 410–425. If EPS reaches 425 in the future, using a 20x PE ratio, SPX could hit approximately 8500. If earnings continue to improve, there’s fundamental support for a long-term move toward 9000. However, Tom Lee also believes caution is needed around the 8000 level. Major market corrections often occur when sentiment is at its peak. He predicts there could be a quick 8%–10% adjustment, but it would likely be a healthy reset within the bull market. Why might a pullback happen near 8000? His reasoning points to leverage + interest rates + midterm elections. One of the biggest short-term risks right now is the rapid increase in margin debt. After a prolonged period of low volatility, positions and leverage have grown significantly. If an unexpected catalyst emerges, it could easily trigger rapid deleveraging. Stephanie Guild refers to this type of market movement as a Speed Crash. In an AI-driven bull market, the pace of gains is accelerating, and corrections could be equally swift—potentially seeing slow gains over a month wiped out in just a few days. There are also several other potential risks ahead: Fed policy, a sudden rise in U.S. Treasury yields, policy uncertainty from midterm elections, and the impact of SpaceX’s upcoming unlock on market liquidity. In the medium to long term, this bull market still looks healthy, supported by earnings growth + market breadth expansion. The biggest difference between now and 1999 is that this rally still has strong earnings support. Since late March, S&P 500 earnings expectations have risen significantly, while PE ratios have compressed by about 2 turns. Stock prices may be hitting new highs, but earnings growth is outpacing them, making this more of an earnings-driven rally. Another key signal is that market breadth is very healthy. Over the past three months, the rally hasn’t been limited to just the Mag 7 and AI stocks. Capital has started flowing into sectors like healthcare, financials, industrials, materials, energy, and utilities. This is crucial. In a true late-stage bull market, you typically see the index hitting new highs with fewer and fewer stocks participating. Right now, more sectors are joining the rally, so there’s no sign of the typical narrowing structure at the top.