The S&P 500 Index, tracked by the SPDR S&P 500 ETF Trust (SPY), continues to set new highs, fueled by investor optimism and the recent wave of interest rate cuts. September marked the first positive return for the index since 2019, creating a sense of bullish momentum heading into the final quarter of the year.
Benzinga conducted a poll to gauge investor sentiment about the S&P 500’s performance for the remainder of 2024. The results reveal a cautiously optimistic outlook:
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Raging Bull Run:
34% of respondents believe the index will close the year above 6,000, indicating a significant surge.*
Holding Steady:
51% expect the S&P 500 to finish between 5,400 and 5,700, representing steady growth and building on the current year-to-date gains of over 20%.*
Devastating Crash:
Only 16% anticipate a downturn, predicting the index to fall below 5,000, a level last seen in May 2024.The majority of respondents, therefore, anticipate a strong end to the year for the S&P 500. While a significant portion sees potential for further growth and new highs, a considerable number also believe the index will experience a correction after reaching those highs.
This optimistic outlook is further reinforced by historical trends. Presidential election years have historically been strong for the stock market, with the S&P 500 posting gains in 14 out of the past 16 presidential elections. The only exceptions were during the dot-com bubble (2000) and the global financial crisis (2008). The current performance of the S&P 500, with a 20.9% year-to-date return, surpasses the average performance of the last five presidential election years, which stands at +10.5%.
The recent interest rate cuts and the strong historical performance during presidential election years have created a favorable environment for the S&P 500. While some investors anticipate a potential correction after reaching new highs, the overall outlook for the index remains positive for the remainder of 2024.
