Helped by a U.S. economy that remained strong despite widespread predictions for a recession as well as a dovish shift in tone from the Federal Reserve last fall, the S&P 500 jumped 24% in 2023.

Only a handful of Wall Street analysts expected a rally of that magnitude, leading to skepticism that another huge leap was possible in 2024. In fact, JPMorgan predicted the S&P 500 would drop sharply this year. Meanwhile, Morgan Stanley expected an average year with returns in the single digits, not a repeat of double-digit gains.

Fast forward to today, and the S&P 500 is already up 23% so far in 2024, nearly matching last year’s advance. That’s despite the Fed beginning its rate-cutting cycle later than hoped and with fewer cuts anticipated for the year.

Instead of being fueled by Fed rate cuts, the stock market rally has had other catalysts: the economy has continued to defy expectations with its robustness, corporate earnings have come in strong, and the AI boom still has legs.

In recent weeks, Wall Street has been warming up to the idea of another big gain. Earlier this month, Goldman Sachs chief U.S. equity strategist David Kostin said the S&P 500 would hit 6,000 by the end of the year and 6,300 a year from now. That was up from Goldman’s earlier predictions that the S&P 500 would reach 5,600 by year’s end and 6,000 over the next 12 months. 

If the broad stock market index hits that target, it would represent an increase of 26% for the year.

Jay Hatfield, CEO at Infrastructure Capital Advisors, has been saying for months that the S&P 500 would end the year at 6,000. That assumes the U.S. election produces a divided government, which is more likely to lead to stable regulatory policy and lower government spending, he reiterated in a recent note.

And on Friday, Sandra Cho, founder and president of Pointwealth Capital Management, told CNBC that she sees the S&P 500 finishing the year at about 6,000.

“We’re in the soft-landing camp,” she said. “We definitely feel like the Fed has done a pretty good job. There’s been a couple of hiccups, but [it] has done a pretty good job as far as factoring in inflation and managing what’s going on, especially with the geopolitical events happening.”

Of course, not everyone is convinced that the good times will keep on rolling. Nassim Nicholas Taleb, who wrote the book The Black Swan about unpredictable events, said the current environment is similar to what existed during previous collapses, pointing to complacency in the market and the earlier era of low rates that taught people to avoid conservative investments. 

Now, valuations are “crazy” and built on a lot of hope, while the economy looks “very confusing” as data have been sending mixed signals lately, he told Bloomberg TV last Friday.

Similarly, his colleague Spitznagel warned recently that the uninversion of the yield curve after years of being inverted, is the opening signal for big reversals down the line as a recession nears.

“That’s when you enter black swan territory,” he told Bloomberg TV last month. “Black swans always lurk, but now we’re in their territory.”