Historical data suggests that stocks are likely to rise further given their strong performance to date. The fact that this is an election year also bodes well. The S&P 500 index has risen more than 15% so far this year, as the artificial intelligence craze has pushed large technology stocks higher, and investors still hope that the Federal Reserve will start cutting interest rates later this year. With the exception of real estate, all sectors that make up the index are expected to end the first half higher. History provides reason for optimism, according to data analyzed by CFRA Research’s Sam Stovall. Between 1945 and 2023, whenever the S&P 500 rose in the first half of the year, it rose an average of 5.3% in the second half. The overall index has been higher in the second half of the year in more than three out of every four years when it has been in the green for the first six months. Even better: The fact that the S&P 500 has performed so well this year makes the outlook even better. In a year when the S&P 500 rose more than 10% in the first six months, it rose 7.9% in a typical second half. In the second half of the year, the index was positive for more than four out of five years. Presidential election years also typically pay off in the second half of the year, according to Stovall’s data. Looking at all election years since World War II, the S&P 500’s average gains in the third and fourth quarters were 0.9% and 2.4%, respectively. Throughout the second half of the year, the S&P 500 rose an average of 3.5%. Things are looking brighter for a presidential election year, with a first-half win. Under these circumstances, the S&P 500 rose an average of 1% in the third quarter and 3.8% in the fourth quarter. A total increase of 4.9% was achieved in the first half of the year. Some investors are wondering how much further the S&P 500 can rise after hitting record highs this year. The median forecast among market strategists means the index will end 2024 less than 1% above Thursday’s closing price, according to an exclusive survey by CNBC Pro.
