This year, Wall Street extended its artificial intelligence-driven bull run into a second year, well exceeding top strategists’ year-end forecasts. In fact, all of this turned out to be very wrong. Initial expectations for the S&P 500 in 2024 ranged from JPMorgan’s low of 4,200, predicted by Dubravko Lakos-Bujas, to Oppenheimer’s John Stoltzfus predicted a high of 5,200. The S&P 500 closed at 6,051.25 points on Thursday, more than 800 points higher than the highest forecast at the beginning of the year. Year-to-date gains are 27%. Several factors caught most on Wall Street off guard. First, many strategists expect the U.S. economy to enter a recession in 2024. On the contrary, the economy has maintained stable growth, the labor market has continued to expand, and inflation has tended to decline, approaching the Federal Reserve’s 2% inflation target. Second, the Fed can start cutting interest rates even as the economy continues to grow. The central bank began cutting rates aggressively in September, lowering the federal funds rate by 50 basis points, or half a percentage point. Third, Donald Trump’s return to the White House has sparked excitement in markets, with investors betting on deregulation and lower taxes. Together, these factors have propelled stocks to dozens of record highs this year. With less than a month left to trade, the S&P 500 is ahead by 26.9%, not even including dividends. As a result, strategists updated their full-year 2024 outlook to reflect the changing conditions. The current highest price is 6,200, also from Oppenheimer, indicating that there is still room for an increase of 2.5% from current levels. JPMorgan maintained its original target, at least on paper, making it still Wall Street’s lowest forecast. Barring disaster in December, strategists at Evercore ISI, Goldman Sachs, UBS and Wells Fargo Investment Institute have also proven too pessimistic this year. Evercore ISI senior managing director Julian Emanuel and Goldman Sachs chief U.S. equity strategist David Kostin initially had year-end targets of 4,750 and 4,700, respectively, although both later updated their forecasts to 6,000. In fact, before the start of the new year, stocks started surging towards the end of 2023, with the Goldman Sachs team raising their 2024 forecast to 5,100. S&P 500 Index. Bank of America’s Savita Subramanian initially set a year-end target for the S&P 500 of 5,000, with a 2023 close at around 4,770. She raised it to 5,400 in early March, suggesting gains of about 5% at the time, and most recently to 6,000 on Nov. 15, saying the broad market index “is statistically on track on almost every metric.” “expensive level”, but with higher quality and lower cost. Compared with previous decades, the degree of leverage is higher and assets are lighter. Looking to the future, many strategists have released their outlook for 2025, believing that there is still a lot of room for U.S. stocks to operate. For the latest year-end targets for Wall Street’s S&P 500, check out CNBC’s Composite Market Strategist Survey, which is updated quarterly or when the investment banks’ own forecasts are updated.
