Tom Lee Thinks One Investor Might Be Behind Nasdaq’s Stock Crash

Intel misplaced virtually a 3rd of its worth on Friday. By the shut, the Nasdaq Composite had sealed its worst month since March 2025, down 5.3%.

Tom Lee of Fundstrat, a Wall Street analysis agency, has one other suspect. He thinks one large investor could have been compelled to dump tech shares, leaving tech holders with the losses.

Why Tom Lee Thinks One Investor Was Forced to Sell

Speaking on CNBC because the Nasdaq slid on Friday, Lee stated the market was preventing an “inner battle” and that the promoting regarded compelled.

“Today seems to be like somebody’s getting liquidated. I don’t know if it’s an establishment,” he said.

By “liquidated,” Lee means forced to sell. This occurs when an investor buys shares with borrowed cash and costs then fall. The lender desires its a reimbursement, so the investor has to promote at any value.

Selling that large drags costs even decrease. Lee thinks that’s what hit tech on Friday, not buyers abandoning shares.

As proof, he pointed to a model of the S&P 500 that counts each firm equally, so a small agency issues as a lot as an enormous like Nvidia. That index was rising whereas he spoke, an indication to Lee that cash was nonetheless in shares.

By the shut, it had slipped 0.79%. The common S&P 500, the place the largest corporations rely most, fell 1.82%.

Bad Earnings Hit Tech the Same Day

Intel fell 28.6% after a weak fourth-quarter forecast, its worst day since 1974. Amazon reported $42.4 billion in detrimental free money movement, pushed by heavy AI spending.

Every week earlier, Lee stated yields again under 5% meant the AI selloff was ending. On Friday, the 10-year Treasury yield closed at 4.93%. The Nasdaq nonetheless had its worst day since June 5.

Steve Sosnick, chief strategist at Interactive Brokers, stated his retail purchasers had not fled. On Thursday, although, they piled into Alphabet.

Why Lee Says Wall Street Is Waiting for November 3

Lee says large buyers lack the conviction to purchase falling shares earlier than Tuesday’s midterm elections. Until then, he warned, a small push may ship costs sharply decrease.

“I feel individuals are marking their calendar till November third,” he added.

CNBC’s anchor stated markets count on Democrats to edge forward in each chambers of Congress. Sosnick known as that the prevailing principle.

CME FedWatch additionally places the percentages of a December fee hike at 72%.

Lee says the patrons will come again. Tuesday’s vote will present whether or not they do.

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