"S&P 500 Hits Record High 30 Times, Set to Rise Further" Wall Street Raises Forecasts

Goldman, Evercore Followed by Citigroup Upgrade
Tech Stocks Rally...S&P 500 Hits 30th Record High This Year

The S&P 500 index, centered on large-cap stocks, has set a record high for the 30th time this year alone, and Wall Street investment firms are consecutively raising their year-end forecasts. Following Goldman Sachs and Evercore ISI, Citigroup also raised its target by nearly 10%.

On the 17th (local time), Citigroup announced that it would revise its year-end S&P 500 index forecast upward from 5100 to 5600. Scott Kroner, Citigroup's U.S. equity strategist, cited the continued strength of the Magnificent 7 (M7) stocks and the earnings growth expectations of S&P 500 companies as the background, explaining that "the weighted effect of large-cap growth stock groups is having a significant impact on the price movements of the index." He believes there is an additional 2.3% upside potential compared to the S&P 500 closing price of 5473.23, which set the 30th record high this year.

[Image source=Reuters Yonhap News]

Recently, several major investment firms on Wall Street have been confirmed to raise their S&P 500 forecasts in succession over the past few days. Since the market close last Friday, the 14th, three firms have raised their year-end forecasts. Goldman Sachs raised its target from 5200 to 5600, and Evercore ISI raised theirs from 4750 to 6000.

In particular, Goldman Sachs projected that if the most optimistic scenario materializes, the S&P 500 index could soar to 6300 by the end of this year. This marks a complete turnaround from just over a month ago when they assessed that there was no further upside potential for the S&P 500 index. Julian Emanuel, strategist at Evercore ISI, who significantly raised forecasts citing the AI rally, is also known as one of Wall Street's representative pessimists, making this upward revision especially meaningful.

Bloomberg News reported, "The strong economy, corporate earnings, and optimism that the Federal Reserve (Fed) will cut interest rates within the year are once again accelerating the rally chase among Wall Street experts." As of this day, the S&P 500 closing price already exceeds the Wall Street average year-end target of 5275.18 tracked by Bloomberg. Some investment firms, including Goldman Sachs and UBS Group, have already raised their year-end forecasts three times this year.

The common reasons these investment firms cite for their upward revisions include a stronger-than-expected economy, corporate earnings, and expectations of a monetary policy shift due to easing inflation. Citigroup raised its earnings per share estimate for S&P 500 listed companies this year from $245 to $250, reflecting optimism about corporate earnings. Goldman Sachs also expects strong earnings growth from large tech stocks such as Apple and Microsoft (MS) to drive further gains in the S&P 500 index. Evercore ISI analyzed that inflation easing, expectations of Fed rate cuts, and sustained U.S. economic growth are supporting a Goldilocks scenario (neither too hot nor too cold). On the other hand, among major Wall Street investment firms, JP Morgan holds the lowest forecast at 4200.

Meanwhile, the three major New York stock indices all closed higher, buoyed by the strength of large tech stocks represented by the Magnificent 7. The S&P 500 index closed at 5473.23, up 0.77% from the previous session, marking the 30th record high this year alone. By stock, all Magnificent 7 stocks except Nvidia showed a rally. In Nvidia's case, it hit an intraday high on news that its investment weighting would increase due to asset rebalancing of technology-focused exchange-traded funds (ETFs), but it turned downward before the close and ended slightly lower.