The S&P 500 is up 14% YTD. Economists at Société Générale analyze the index outlook.

AI momentum will build further in H2

We think the AI momentum will build further in H2 and the 500 pts gain in the S&P will not reverse. Consequently, we raise our S&P 500 year-end target from 3,800 to 4,300. 

We believe that profit margin reversal, credit weakness and sharply rising recession risk will most likely be visible in 1H24, bringing the S&P 500 back to 3,800 (our S&P 500 recession estimate). 

Ultimately, the new broad-based bull market is likely to start with a mild recession, Fed rate cuts and/or a positive yield curve.