The S&P 500 index is on track to climb to the 5,000 level by 2024, Bank of America experts offered a sunny forecast based on historical market data.
According to the bank, the rally that began in 2013 follows a similar scenario seen in the 1950s and 1980s. This means the index tracking the 500 largest US companies has an upside potential of at least 13%. By the way, it traded at around 4,400 on Thursday.
In an overlay chart, experts compared the bull markets of the 1950s and 1980s with the current one and found that they lined up after robust gains in recent months.
The chart also shows that the latest uptrend could last until at least 2028, with the S&P 500 surging above the 6,000 mark in 2026.
The driving force behind its growth is a correlation between stock market performance and the four-year US presidential cycle.
The S&P 500 may well extend gains into the second half of the year, with an average return standing at 3.9%.
The third year of the presidential term is usually the strongest for the stock market, although the fourth year has also historically shown strong performance in the run-up to a new election.
