Get Market Outlook Letter

Current market expectations for an early start to developed market (DM) easing cycles are likely to be disappointed. A more challenging macro backdrop is anticipated for equity markets in 2024. Lackluster earnings growth and geopolitical risks are set to weigh on the outlook for stocks.

Wall Street's outlook for 2024 is rosier. Analysts see lower borrowing costs, a soft landing (that is, an economic slowdown that avoids a recession) and a pretty good year for investors.

US stock market returns could be lower over the next 20 years than they have been in recent decades. Long-term population and productivity trends may slow global economic growth, which has a strong influence on markets. Forecasts of economic growth may give insight into how markets could fare in the future.

The benchmark S&P 500 index inched lower Friday, the last trading day of 2023, but ended the year with a 24.2% gain. The Dow Jones Industrial Average rose more than 13% this year, and the Nasdaq soared 43%, driven by gains in big technology companies, including Nvidia, Amazon and Microsoft.

America's S&P 500 index, a broad gauge of US stocks, gained 25% over 2023, notching up a record high. The tech-focused Nasdaq Composite jumped by about 45%, led by the “Magnificent Seven” – Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia and Tesla.

2024 Stock Market Outlook Key Takeaways The technology sector moved back to a choice for underweighting along with industrials, whereas communications, basic materials, real estate, and utilities are attractive overweightings. The rate of economic growth is forecast to slow in 2024, but no recession.

Wall Street is feeling sunny about the stock market in 2024, including the “Magnificent Seven” tech companies that dominated last year. The average one-year price target for stocks within the Magnificent Seven is about 11% higher than Friday's closing price, ing to estimates compiled by FactSet.

Despite no shortage of chatter about an inbound recession, the U.S. stock market is going to end 2023 on an upbeat note, with the S&P 500 index up 23.5% as of Dec. 18. That's saying something given the downbeat vibe investors felt last January.