The stock market has been on a rollercoaster ride this year, but investors are reaping the rewards as markets have surged to new highs, surpassing analysts’ 2024 estimates. The S&P 500 has seen a more than 10% increase since January, exceeding Goldman Sachs’ year-end target of 5,200 last week.
The big question now is what comes next for the market. Goldman Sachs’ strategists are weighing in, presenting a scenario in which mega-cap tech stocks could continue to drive the S&P 500 even higher, potentially reaching the 6,000 level by the end of the year.
Unlike previous market crashes, this rally is different as investors are focusing more on companies’ actual profits rather than just hype. While enthusiasm for artificial intelligence is high, analysts believe that growth expectations and valuations for tech stocks are not in bubble territory.
Goldman Sachs also presented a more conservative scenario in which the S&P 500 could climb 11% to 5,800 by year-end, catching up to pre-pandemic valuation levels. However, the analysts noted that the market’s direction will heavily depend on the Federal Reserve’s next policy move regarding interest rates.
In a worst-case scenario, if mega tech stocks fail to meet expectations, markets could see a 14% decline this year. But for now, Goldman analysts are sticking with their baseline prediction of 5,200 for the S&P 500, suggesting a slight drop before the end of the year.
Overall, the market outlook remains uncertain, with various factors at play. Investors will be closely watching for any shifts in interest rate policies and economic growth forecasts that could impact market performance in the coming months.
