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UBS: the reasons why the S&P 500 index may grow by another 5%


May, 15 2024
watermark Economic news

According to strategists at Swiss bank UBS, the US S&P 500 index may reach 5,500 points this year, which implies an increase of 5%.


The main factors that could contribute to growth include disinflation, lower Fed rates, increased corporate revenues, and continued investment in artificial intelligence. At the moment, when almost all companies in the index have already published their reports, average revenues, especially in the technology sector, remain high: profits have been revised up by 7% since March. A decrease in market volatility may also stimulate a summer rally.


It is predicted that by the end of this year, the S&P 500 index may reach the level of 5,500 points. Recently, in April, the index fell 4.5% from its peak due to negative inflation data, which increased concerns about further interest rate hikes by the Fed.


However, in early May, some of these concerns abated due to a slowdown in wage growth in the United States and the overall stability of the economy.


  • The key factors contributing to the growth of the stock market are a further decrease in inflation and a slowdown in price growth, which makes an increase in interest rates unlikely and stimulates the growth of stocks.


  • In addition, the stock continues to grow steadily due to increased corporate profits. More than 75% of companies exceeded revenue forecasts.


  • And finally, continued investments in artificial intelligence will also contribute to further market growth.

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