On September 25th, Caixin Media (Editor: Bian Chun) as the Fed's rate cut cycle increases the possibility of a US economic downturn...But after the bursting of the internet bubble and the Fed's rate cut in 2001, the ROI dropped by more than 10%.With the Fed starting a rate cut cycle, the optimism of Wall Street towards US stocks is growing, with analysts predicting that the S&P 500 index will break through the 6000 point mark.

Citigroup's Head of US Stock Trading Strategy, Stuart Kaiser, said in a media interview on Tuesday that this bullish sentiment makes sense.

"I think the most optimistic scenario for this year is: the US economy can avoid a recession, the Fed will carry out an insurance rate cut, right? This is a rational scenario now," Kaiser said.

He predicts that if the above conditions (avoiding an economic recession and Fed rate cuts) are both met, by the end of this year, US stocks may rise another 5% to 10%.

So far, half of the above conditions have been met. Last week, the Fed finally started the rate cut cycle, significantly reducing the federal funds rate by 50 basis points, aiming to prevent future economic downturns.

The 'insurance-style' rate cut has been welcomed by stock market investors, and the US stocks have repeatedly reached new highs since then. Kaiser stated that as long as an economic recession does not occur, the stock market's upward trend will continue.

However, he also pointed out that although the Federal Reserve emphasized at its recent policy meeting that an economic recession is not expected to arrive soon, everything depends on the upcoming employment market data to be released.

Since August, the continuously declining job market has been the core driving factor of economic slowdown concerns. Investors need to see strong job data in the upcoming monthly reports; otherwise, the prospects of an economic recession may become increasingly plausible.

Kaiser warned that an economic recession could easily undermine any efforts by the Federal Reserve to support the market.

Some other major banks are also closely monitoring US employment data.

According to Morgan Stanley, if the US unemployment rate drops below 4.1% andNon-farm employmentexceeds 0.15 million, investors can celebrate. This would be the best scenario for the market, and the stock market will continue its upward momentum. However, if the unemployment rate climbs above 4.3% and non-farm employment falls below 0.1 million, investors should prepare for the worst.

There is a growing call for the 6000 point level.

On Tuesday, US stocks collectively closed higher in the Eastern Time, with both the S&P 500 index and the Dow hitting historical highs during the day, closing at new record levels. At the close, the S&P 500 index rose by 0.25% to 5732.93 points.

If Kaiser's prediction comes true, the S&P 500 index will rise above 6000 points by the end of the year.

Currently, Wall Street's calls for the S&P 500 index to break through the 6000 point level are increasing. David Kostin, Chief US Stock Strategist at Goldman Sachs, also predicted on Tuesday that once the dust settles from the US presidential election, US stocks are expected to continue rising, with the S&P 500 index near the 6000 point level a year later.

Director and General Manager of the venerable US asset management institution, Aboomheim Asset Management Company.Technical AnalysisRecently, Analyst Ari Wald also stated that there are almost no signs indicating that the US stock market is about to peak, and the record-breaking uptrend in the stock market will continue. Wald's target price for the S&P 500 index in the first half of 2025 is 6000 points.