The bull market on Wall Street is still ongoing. $S&P 500 Index (.SPX.US)$ The closing on Monday set the 40th record high of the year, currently less than 5% away from 6000 points.

With the Federal Reserve expected to continue cutting interest rates in the near future, some analysts predict that the S&P 500 index will soon break through the 6000 point mark.

DataTrek co-founder Nicholas Colas wrote in a report to clients on Monday, 'Now that the Federal Reserve is officially in easing mode, the U.S. economy continues to grow steadily, and the most likely trend for U.S. stocks is to continue rising.'

Colas acknowledges that 6000 points will be an 'extremely optimistic' target price. But he is not the only one publishing bullish research reports. Last Thursday, Brian Belski, Chief Investment Strategist at BMO Capital Markets, raised his year-end target for the S&P 500 index from 5600 points to 6100 points, becoming the most optimistic forecaster among major stock strategists tracked by the foreign media.

Belski wrote, 'Just as we were surprised by the strength of the market rally with our last target price increase in May, we still believe that only making minor adjustments is not enough.'

The most notable part of Belski's target price increase may lie in the fact that he did not simultaneously raise his profit growth expectations for this year. According to Belski's calculations, if the S&P 500 index closes at 6100 points by the end of this year, its P/E ratio will reach 24.4 times, far higher than the average level of about 18 times over the past 10 years.

Belski acknowledges that this "may appear high relative to historical levels," but focusing on the closest historical period often makes it more persuasive than the average, with the emphasis being on the soft landing period in 1995. Belski points out, "That was a period when the index was able to maintain a P/E ratio of over 20 for several years."

On the other hand, Lori Calvasina, Capital Markets USA Equity Strategist at Royal Bank of Canada, has not adjusted her target price of 5700 points.

Calvasina admits that there is "upside risk" to this forecast if the economy continues to grow. However, this strategist reminded clients in a weekly report sent out Sunday evening last week that the good times in the U.S. stock market won't last forever and will always come with twists and turns. With the upcoming election, the American Association of Individual Investors' net bullish sentiment is high enough to signal that "danger is near."

These are all bullish indicators that peaked before the recent pullback, but this time things seem a bit different. Strategists are not only talking about the prosperity of artificial intelligence like in early 2024 when they called for the S&P 500 index to reach 6000 points.

Earnings for the other 493 stocks, aside from the 'Big Seven,' have been on the rise. The top 10 stocks in the S&P 500 index fell by 0.5% from early July to September 19, while the other 490 stocks rose by 6.2%.

According to Belski, this signifies that the other 490 stocks have performed the best in nearly two years, and since the beginning of the third quarter, 339 stocks in the S&P 500 index have outperformed the index itself. As per Belski, this is the best performance in about 22 years, giving a sense that the market is experiencing a multifaceted rebound. Belski writes:

"We expect this trend to continue and help support further market gains in the coming months, even if the stock prices and fundamentals of the 'Big Seven' continue to slow down."

As the narrative of the Federal Reserve seems to have come to a temporary conclusion, the third-quarter financial reports of US stocks will begin to be released in a little over two weeks, which will serve as the first touchstone of the 'new bull market.' Will the earnings expectations of stocks that investors have been rushing to buy continue to rise? We wait and see.

Editor / jayden