As October begins, the 2026 market outlook of Tom Lee, co-founder of Fundstrat and widely regarded as Wall Street's leading bull, is drawing renewed attention. The core of the scenario he presented earlier this year was that the bull market would not proceed smoothly all year round, but could re-enter a strong upward phase after undergoing a significant correction and volatility. Notably, since he identified the period of market difficulty as lasting through October, his remarks at the time are worth revisiting.

■ Tom Lee's 'Three-Stage Scenario'

Appearing on CNBC on June 3, Tom Lee said the 2026 stock market could unfold in three major stages.

▲ Stage 1 (Rally): An upward phase based on corporate earnings. At the time, he assessed that better-than-expected earnings from major U.S. companies were supporting the stock market rally.

▲ Stage 2 (Correction): A warning that market conditions could change. He cited energy market shocks, uncertainty from leadership changes at the U.S. Federal Reserve (Fed), and the possibility of increased stock supply related to initial public offerings (IPOs) by large technology companies as variables.

▲ Stage 3 (Rerally): After the U.S. midterm elections, market pressure could ease and a strong rally could resume.

In particular, he noted that listings by large companies such as SpaceX, OpenAI, and Anthropic, and the subsequent release of lock-up shares, could act as a burden on the existing stock market.

Of course, the emergence of large-scale new supply in the stock market does not necessarily act as a negative. However, if investment funds shift toward newly listed companies or the supply of existing stocks increases, supply-and-demand pressures could grow. Even if expectations for the artificial intelligence (AI) industry are high, if the valuations of related companies are excessively high or the market fails to fully absorb the new stock supply, volatility across tech stocks could expand. Tom Lee predicted that if these factors overlap, investors could feel pressure similar to a bear market.

■ October Market: Watch 'Internal Changes' Rather Than Index Moves

So is the market moving as he forecast? Entering October, what deserves attention is not simply the ups and downs of stock indices but the changes occurring within the market. Even if expectations for AI-related mega-cap tech stocks persist in the U.S. market, interest rates, energy prices, and valuation concerns could all weigh at the same time. In particular, if a rally centered on large-cap tech companies continues while other sectors and stocks remain relatively sluggish, index movements alone make it difficult to gauge the overall investment sentiment of the market.

This is why Tom Lee's earlier forecast attracts interest. Rather than denying the market's long-term upside potential, he presented a scenario in which the market could experience significant shocks during the upward process.

■ Implications for Bitcoin, Ethereum, and Ripple

There are also points worth noting in the virtual asset (cryptocurrency) market. Major virtual assets such as Bitcoin (BTC), Ethereum (ETH), and Ripple (XRP) can be influenced by the liquidity environment of the U.S. financial markets and changes in investors' risk appetite. If risk-off sentiment spreads in the U.S. stock market, selling pressure could be transmitted to the virtual asset market as well. In particular, if concerns about rising interest rates or shrinking liquidity grow, virtual asset investment sentiment could also be affected.

However, the three-stage outlook presented by Tom Lee is fundamentally about the U.S. stock market. Applying it directly to the price path of Bitcoin or other virtual assets is a stretch. A stock market correction does not necessarily lead to a concurrent decline in virtual assets, and each market has its own variables stemming from supply and demand, policy, and investor composition.

■ "Rerally After Midterms... A Bull Market to Rank Among the Best in 2027"

Even more eye-catching is the third stage of Tom Lee's forecast. He suggested that market pressure that could last through October would ease after the U.S. midterm elections, with the stock market potentially resuming a strong rally. In particular, he offered the optimistic outlook that 2027 could see one of the strongest bull markets investors have ever experienced. This means he did not view the September-October correction merely as the start of a long-term downtrend.

From Tom Lee's perspective, even if short-term shocks occur, corporate earnings, productivity gains from AI technological advances, and expectations for economic growth can underpin the long-term bullish thesis.

■ Remaining Variables... Whether the Outlook Materializes Remains Unknown

That said, it is still uncertain whether this outlook will actually materialize. It cannot be ruled out that interest rates, energy prices, and IPO-related supply-demand variables pressuring the market may persist longer than expected. Also, the growth of the AI industry itself and the rise of related stock prices should be examined separately. Even if the industry grows, if high expectations are already reflected in stock prices, investment returns could differ.

Ultimately, two questions matter for the October market. First, how strongly will the correction pressure Tom Lee warned about actually appear? Second, can the strong recovery he predicted after year-end become reality? Neither the stock market nor the virtual asset market is free from these questions.

The three-stage scenario Tom Lee presented in June is drawing attention again in October because the market is now passing through the very period he pointed to. However, the timing of the forecast matching does not necessarily mean the prediction was accurate. The market's direction is likely to be determined ultimately by actual corporate earnings, monetary policy, liquidity changes, and investor fund flows.

What is important in Tom Lee's outlook is not simply the optimism that a bull market will follow the correction. It is the warning that even on the way to a bull market, the market can experience significant shocks. Whether October's volatility remains a temporary correction ahead of a year-end rebound or becomes the starting point of longer uncertainty is something to be confirmed going forward.

[This article was written for informational purposes based on publicly available market outlooks and does not constitute investment advice for any specific stock or virtual asset. Tom Lee's remarks are forecasts about future markets and may differ from actual results. Stocks and virtual assets are highly volatile investment assets with the risk of principal loss. All investment decisions and responsibilities rest with the investor. This article was written with the assistance of AI.]