Tom Lee Forecasts Strong Market Rally If Fed Holds Rates

Fundstrat's Tom Lee says he now sees upside risk in September despite mounting market concerns. He believes that if the Federal Reserve holds interest rates unchanged, there could be a strong rally in the stock market. The S&P 500 is currently on track to post gains of around 3% in August and Lee thinks it could rise above 8,000 before correcting.

Lee expects institutional allocation to crypto to strengthen in the fourth quarter, driven by several catalysts including regulatory progress. He pointed to the Clarity Act as a potential game-changer for Bitcoin's price, which has recently fallen below $78,000. Lee remains bullish on stocks through year-end and his 8,200 S&P 500 target may be too low due to stronger earnings expectations.