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This is when Wells Fargo expects the S&P 500 to hit its 5535 target

Published 2024-05-24, 07:50 a/m
© Reuters.

Wells Fargo (NYSE:WFC) analysts on Friday reaffirmed their year-end target for the S&P 500 at 5,535, a surge they believe will be driven primarily by the market momentum.

The investment bank thinks that an uptrend toward this target will be helped by a late-year rally, catalyzed by Election Day and the start of a long-term easing cycle.

"Our year-end SPX target remains a Momentum-led 5535, likely helped by a late-year rally catalyzed by Election Day and the start of a long-term easing cycle."

Currently, the S&P 500 has shown resilience despite some choppiness, down 0.7% week-to-date but up 10.4% year-to-date.

While technology stocks, particularly NVIDIA Corporation (NASDAQ:NVDA), have further bolstered performance, other sectors have lagged, Wells Fargo notes. Without Nvidia’s 12% weekly rally, the S&P 500 would have seen larger declines, especially in midcap and small-cap indices.

Meanwhile, the ongoing Q1 earnings season provided mixed signals but generally supported a positive outlook, analysts point out.

The rate of earnings per share (EPS) beats was typical, though sales beats were less frequent. Most notably, the S&P 500's aggregate 5.7% year-over-year EPS growth outpaced pre-season expectations of 3.4%.

Overall, this reporting season was a more positive catalyst for small caps, the bank said.

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