The stock market climbed the wall of worry to impressive gains in 2023. After that big run, the stock market forecast for 2024 hinges on a key question: Will the Federal Reserve achieve a soft landing for the U.S. economy? And in a related question, can stocks extend gains?
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Wall Street is mostly convinced that the Fed will reach its goal of a soft landing for the U.S. economy. That means there will be slower economic growth, but no recession, leading to interest rate cuts in 2024.
In that environment, most analysts predict improved corporate earnings growth for S&P 500 companies. As for how the stocks will perform in the coming election year, 2024 forecasts for the S&P 500 vary widely, but the consensus seems to fall in the range of 8%-9% gains, a little under the index’s historical average of about 10%. Among other trends, artificial intelligence is widely considered to remain a key investing theme in 2024.
The stock market enters the new year with the wind of a stellar 2023 at its back. The year is ending with the Nasdaq composite on track for its sixth-best annual performance. The rebound was especially welcome after the index plunged 33.1% in 2022. Taking into account 2020’s 43.6% explosion, the Nasdaq is now on pace to have two of its best six best years in history in the current decade.
The S&P 500 is on track for a 22% increase in 2023, which would be about double its historical average annual return. It also rebounded nicely from a 19.4% loss in…
