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Market strategist: Tamping down 2015 expectations

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The Dow briefly dropped below 540 points in a volatile session Tuesday. All three major U.S. indexes were off three percent and stood in correction territory as weak China data hit stocks.

Read MoreDow plunges 540 points

China's PMI index edged down to 49.7 percent in August, while the final Caixin/Markit manufacturing PMI came in at 47.3 in August, the lowest reading since March 2009.

Crude oil settled down 7.7 percent, at $45.41 a barrel.

Douglas Cote, chief market strategist with Voya Investment Management, with $205 billion in assets, told CNBC's "Power Lunch" Tuesday he is tamping down expectations for 2015

"With drastic reductions in expectations for energy sector earnings, we have lowered our growth rate forecast for the index to 5 percent from 7.5 percent.

The bottom line: 5 percent growth applied to final 2014 EPS of around $118 gives us $124 for 2015."

Cote's affirmed his S&P 500 price target at 2200.

"Given our lowered earnings expectations, this price target now suggests a forecast P/E ratio of 17.7 percent, up from our previous estimate of 16.9 percent."

"This is normalization. Now we have to wait for it to wind down. The one piece of good news in this whole scenario is that the U.S. consumer is gaining confidence, and that will be a 'game changer' for this market."

Cote, who manages the Global Perspectives Fund for Voya, remains bullish across all U.S. equity classes, large, mid and small caps. He also likes global REITs, emerging markets, treasuries, senior loans, high-yield and global bonds.

Volatile market crosses into a 'different world'

The CBOE Volatility Index (VIX), widely considered the best gauge of fear in the market, held high near 30 since last Monday's plunge in stocks. The index held above 31 in Tuesday morning trade.