Fundstrat Managing Partner Tom Lee on Monday warned that U.S. equity markets could face speed bumps in the second half of 2026.

During an interview with CNBC, Lee said that there are four potential triggers that could test both the S&P 500 and the Nasdaq Composite between August and October.

“I do think between now and year end should be something that might feel like a bear market. Not in July, but maybe between August and October,” he said.

Why Lee Is Cautious

Lee explained that the markets would be watching out for the policy direction that the Federal Reserve adopts under Kevin Warsh’s leadership. He cited Warsh’s new framework and approach to inflation.

Lee also said that the lock-in period for Space Exploration Technologies Corp. (SPCX) will begin to gradually begin to unlock during the second half of this year, which he thinks is another headwind for the equity markets.

SpaceX has a staggered unlocking schedule for eligible insiders and employees, with the first 20% shares held by them being eligible for unlock immediately after the company’s second quarter (Q2) results, expected to be reported in late July or early August this year.

“I do think there is going to be a cumulative shortage of petroleum products, so that’s a headwind. And I think margin debt is kind of high. So I think [those] are the four things that could unravel in a way that might feel like a bear market,” Lee added.

July Will Be Better For Stocks, Says Lee

Lee expressed optimism for the equity markets in July, after the S&P 500 declined 1% during last month and the Nasdaq Composite fell around 3%.

He expects Q2 earnings from U.S.-listed companies to surprise to the upside once again, following a better-than-expected performance in the second quarter.

“The markets are going to get cheaper again, and that means there is room for price-to-earnings (PE) to expand. So I think July is going to be a stronger month for stocks,” Lee added.

He said that a lot of fund managers are trailing the benchmark indexes this year, and that they could buy the dip in July after a weak June.

Lee Says 8,000 Is Doable For S&P 500 By End Of 2026

Lee also thinks that the S&P 500 could top 8,000 points by the end of 2026, but added that it is actually a low estimate, with the PE multiple around 20 for fiscal year 2027 earnings.

“I think the PE multiple could be 22 or better, so that would be 8,400… 8,800 would be kind of the upside into year-end,” he said.

Strategists at Morgan Stanley led by Michael Wilson  the S&P 500 to end 2026 at 8,000 points, implying an upside potential of about 7% from current levels, following a surge of over 9% this year so far.

The S&P 500 ETF (SPY) is up 20% over the past 12 months, while the Invesco QQQ Trust (QQQ) is up more than 29%. The Dow Jones Industrial Average ETF (DIA) has gained 19% during this period.

is up 8% year-to-date.