Source: Golden Ten Data

On Tuesday, UBS Global Research raised the bank's target price for the S&P 500 to 5,600 points, the highest target price among major Wall Street banks. This means that the index will rise about 5.6% from last week's close of 5304.72 points, and the bank's earlier forecast target price was 5,400 points.

Since this year, the S&P 500 index has risen 11.2% and continues to reach new highs, mainly driven by lower borrowing costs this year and increasing optimism about artificial intelligence.

UBS said that stronger profit estimates and a “supportive” economic background where the risk of recession recession has subsided will boost the US stock market. UBS strategists led by Jonathan Golub raised the 2024 earnings per share (EPS) forecast from $240 to $245, which will increase by 11.4% for the whole year. They stated:

“In our view, the current environment is still favorable, and the four key positive stock market drivers still largely remain: steady earnings growth, a continued anti-inflation process, a shift in the Federal Reserve, and surging investment in artificial intelligence.”

In February of this year, UBS raised its estimate from 5,150 points to 5,400 points, saying that rising US inflation is often beneficial to stock prices and may benefit companies due to increased pricing power.

With Wall Street's current adjustments to S&P 500 expectations, UBS joined the ranks of major banks such as Deutsche Bank and Wells Fargo, which also predicted that the index would close at 5,500 points or higher in 2024.

Deutsche Bank raised the target of the S&P 500 index to 5,500 points by the end of 2024 last week, and believes that even if the Federal Reserve does not cut interest rates this year, strong corporate profits will support stock valuations, and the S&P 500 index can continue to soar and reach another record high. Bank of Montreal Capital Markets (BMO Capital Markets) predicted earlier this month that the S&P 500 index would reach 5,600 points.

Editor/jayden