Wall Street Forecasters Are Rushing to Lift Stock Outlooks

After sidestepping last year’s scorching stock rally on concern about higher interest rates, Wall Street’s top forecasters can’t get bullish fast enough amid expectations for cuts by mid-year.

UBS is the latest bank to lift its outlook for US equities, ratcheting up its 2024 forecast for the S&P 500 Index by 6% on Tuesday, to 5,150, following the Federal Reserve’s dovish policy shift in December. The move comes roughly a month after the Swiss lender set its year-ahead call for the US equity benchmark at 4,850. RBC Capital Markets boosted its outlook last week, while Goldman Sachs Group Inc. did so in December, a month after setting it.

When publishing their year-ahead outlook on Dec. 11, UBS strategists Jonathan Golub and Patrick Palfrey emphasized upside risks to the firm’s views, citing robust earnings, cooling inflation, the prospect of easier monetary policy and favorable economic momentum.

“Given the Fed’s recent pivot, subsequent decline in rate expectations, and above-trend 2024 EPS revisions, we now embrace this upside scenario as our base case,” the duo wrote Tuesday in a note to clients.

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