市場分析

S&P 500 Soars, Prompting Wall Street to Reassess Year-End Targets

Amos Simanungkalit · 06 Dec 202435K 閱讀

Image Credit: Getty Images

U.S. stocks are on track for one of their best post-election rallies in decades, pushing all three major indexes to new all-time highs and prompting a series of Wall Street price target upgrades, indicating potential double-digit gains for the year ahead.

The S&P 500, a key gauge of blue-chip U.S. stocks, has surged by about 27% this year, with a 20% increase since an August dip tied to rising stock and bond market volatility linked to the Japanese yen. Since the November election, the index has climbed 5.15%, breaking past the 6,000-point mark and exceeding Wall Street's early and mid-2024 projections.

Charlie Bilello, Chief Market Strategist at Creative Planning, highlights that the current S&P 500 level is around 680 points higher than Wall Street's highest 2024 targets and 25% above the average forecast of 4,861 points.

With the market continuing its bull run, which started in October 2022, forecasters are setting increasingly optimistic 2025 targets. Wells Fargo's Christopher Harvey, drawing inspiration from James Bond's "007" moniker, has set a bold target of 7,007 points for the S&P 500 by year-end, one of the highest on Wall Street.

Harvey attributes the market's strong performance to a business-friendly administration, a dovish Federal Reserve, and a robust domestic economy, suggesting that the financial landscape will continue to support a stock rally. "We expect the Trump administration to foster a macro environment favorable for stocks, with the Fed gradually reducing rates," he said.

Earnings growth is also expected to contribute, with profits projected to rise by 14.3% in 2025, following a 10.2% increase this year. The domestic economy is finishing the year stronger than expected, growing at a 3.2% rate, according to the Atlanta Fed’s GDPNow tool.

Federal Reserve Chairman Jerome Powell also affirmed the economy’s strong position, adding that there’s no reason to expect a downturn, which may dampen expectations for further rate cuts next year. However, this is unlikely to derail the current bullish sentiment in stocks and risk assets.