S&P 500 expected to slow down after two strong years, with 6% return projected.

From Investing.com: 2025-01-04 04:00:00

Analysts at Oppenheimer predict a slowdown for the S&P 500 in the coming year after two years of strong gains. Historical data shows that after significant rallies, the index tends to experience reduced momentum, with average returns of 3.7% following a 40% or greater cumulative return over two years.

The S&P 500, currently 27 months into a bull market, is nearing the median duration of past cycles since 1932. While this doesn’t signal an immediate end to the bull market, it suggests a phase of stabilization rather than robust growth. Breakouts to all-time highs often lead to lower gains in the second year.

Oppenheimer’s year-ahead projection for the S&P 500 is a balanced outlook, expecting a 6% return with a target level of 6,400. While the risk of a market top is low in the short term, caution is advised. The year may see corrections and consolidations, with historical patterns showing peak-to-trough declines of about 11% in positive years.



Read more at Investing.com: Why S&P is likely to moderate following back-to-back above-average years By Investing.com