Regardless of Interest Rates... Experts Say "US Stock Market Will Keep Soaring"

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A survey revealed that the U.S. stock market is expected to continue rising this year regardless of whether the U.S. Federal Reserve (Fed) lowers its benchmark interest rate.

On the 12th (local time), Bloomberg reported the results of a survey conducted among 97 economists and others following the U.S. Department of Labor's Consumer Price Index (CPI) announcement and the Federal Open Market Committee (FOMC) decision to keep interest rates unchanged.

According to the survey, 56.4% of respondents stated that the S&P 500 index would maintain its upward trend this year regardless of the Fed's rate cut decisions.

This trend is actually being observed. On the day of the FOMC regular meeting, the Fed showed a hawkish stance by revising its forecast for this year's benchmark rate cuts from three times to once, yet the S&P 500 index surpassed 5400, reaching an all-time high. Typically, prolonged high interest rates exert downward pressure on the stock market due to the sustained high borrowing costs for tech companies, negatively impacting their operating profits.

However, due to the slowdown in inflation and observed corporate growth, it is explained that the stock market will show a rising rally. Only 22.7% of respondents believed that the rally could continue only if the Fed cuts rates, and just 22.7% expected the upward trend to falter.

Recently, Wall Street has been raising its year-end target prices for the S&P 500 index. UBS and BMO Capital Markets raised their year-end target to 5600, while Deutsche Bank and Oppenheimer (5500), Wells Fargo (5535), Bank of America, and HSBC (5400) also raised their targets to the 5400?5500 range.

Meanwhile, Bloomberg reported that market participants also view the bond market as having passed its worst phase. On the day, the yield on the U.S. 2-year Treasury note traded at around 4.75%, down 7 basis points (1bp = 0.01%P) from the previous trading day.