Wall Street Bullish on S&P 500 as Historical Trends Favor Strong Year-End Gains

The S&P 500 has demonstrated impressive growth, rising over 11% year-to-date, with major brokerage firms on Wall Street recently increasing their price targets. This uptick has historical significance, suggesting continued positive momentum throughout the year.

Historical data analyzed by Bank of America indicates that when the S&P 500 experiences a 10% or more increase during the first 100 days of the year, it usually maintains its upward trajectory. The average return for the remainder of such years is 7.1%, with a median of 9.3%, forecasting an S&P 500 index range of 5640 to 5750 by the end of 2024. In comparison, the average and median returns for all years since 1928 are 5.0% and 7.3%, respectively, suggesting a potential year-end range of 5530 to 5650.

The year 2024 is of particular interest as it coincides with a Presidential election year, typically associated with more modest gains. Historically, the S&P 500 has risen 63% of the time during election years, despite an average return of -0.9% and a median return of 0.8%.

The 10.4% YTD gain for 2024 ranks as the second-best start in an election year since 1928, which saw a 12.5% increase. Furthermore, when the S&P 500 has risen in the first 100 days of a Presidential election year, it has continued to rise for the remainder of the year, 93% of the time, with an average return of 10.1% and a median return of 8.9%. These figures set a potential year-end target for the S&P 500 between 5730 and 5800.

For further insights into market trends and to access detailed financial ratios for comparison, visit our FMP API