As the US stock market experiences its strongest rebound in nearly 30 years, surpassing the set target and reaching a historic high, Wall Street strategists are scrambling to increase their forecasts for the US stock market.

In the past month, analysts at Bank of Montreal Capital Markets (BMO Capital Markets), Goldman Sachs, UBS Group, and other investment banks have closely watched the U.S. stock market and raised their year-end expectations for $S&P 500 Index (.SPX.US)$ , expecting the index to continue its accumulated 22% increase in 2024. Since 1997, the S&P 500 Index has never experienced such a large year-over-year increase.

These trends reflect the remarkable resilience of the economy and corporate profits this year. Investors continue to flock to technology stocks poised to benefit from breakthroughs in AI, resulting in a surge beyond expectations.

The significant rise in stock prices is prompting Wall Street forecasters to eagerly raise their outlook for the final stages of 2024 - a phenomenon known as 'strategist short squeeze', where a rapid increase in stock prices forces traders to cover their bearish positions. This brings back memories of last year when the S&P 500 index skyrocketed by 24%, catching them off guard.

With the S&P 500 index surpassing 5800 points, Jonathan Golub and Patrick Palfrey of UBS Group recently raised their year-end expectations for the index. They raised the forecast from 5600 points to 5850 points, while increasing the forecast for 2025 from 6000 points to 6400 points. Although their 2024 outlook implies no further increase in the index, they believe the index will climb another 9% over the next 15 months. This is the fourth upward revision from UBS strategists since the release of last year's annual outlook.

Earlier this month, David Kostin, Chief Stock Strategist at Goldman Sachs, raised his expectation for the S&P index to 6000 points by December. This marks his fourth increase since the last few months of 2023, ranking second among forecasters tracked by Bloomberg.

Brian Belski of Bank of Montreal stated in September that the S&P index could soar to 6100 points by the end of this year, making him the most bullish forecaster for the index at present.

Belzki told clients when raising forecasts, "We are still surprised by the strong market uptrend and have decided once again that more adjustments are needed in addition to gradual adjustments."

Despite traders facing escalating market risks: the tense upcoming US presidential election next month, the Middle East war, and the uncertainty surrounding the Federal Reserve's accommodative policy trajectory after last month's hotter-than-expected job market and inflation data, they still maintain an optimistic mood.

Golub wrote on Tuesday: "The uncertainties of fiscal and monetary policy, as well as potential election outcomes, make the 2025 return rate far from certain."

But this does not hinder his bet that the stock market will continue to strengthen. He pointed out that with inflation slowing, Fed rate cuts, improvements in low-end consumption and business activities, as well as broad-based profit growth, market risks are skewed to the upside.

The stock market's confidence in overcoming the imminent uncertainty comes from accumulated experience. Many strategists have repeatedly underestimated the rise in US stocks. In January of this year, the year-end average forecast for the S&P 500 index was 4867 points, about 17% lower than the index's trading level on Tuesday. The early 2023 forecast was 4050 points, 15% lower compared to the year-end level of the S&P 500 index.

Editor/rice