Oppenheimer sees 12% upside in S&P 500 after Fed’s rate decision today

S&P 500 is pushing to the upside at writing after the U.S. Federal Reserve left its benchmark overnight borrowing rate unchanged at 5.25% to 5.5%.

S&P 500 could hit an all-time high in 2024

More importantly, the central bank now forecasts three rate cuts in the coming year – which could result in continued strength in the benchmark index in 2024, as per an Oppenheimer strategist.

John Stoltzfus is convinced that S&P 500 will hit 5,200 level by the end of next year. That suggests about a 12% upside from here. His research note reads:

Markets don’t move up in a straight line and setbacks are always likely, but those with patience and perseverance should see gains over the intermediate and long term.

Note that the benchmark index is already on track to closing this year with an over 20% gain.

Fed may cut rates another four times in 2025

Members of the Federal Open Market Committee also signalled another four rate cuts in 2025 on Wednesday as “inflation has eased over the past year”.

A day earlier, the U.S. Bureau of Labour Statistics said consumer prices were up 3.1% on a year-over-year basis in November – in line with the Dow Jones estimate as Invezz reported here.

Oppenheimer strategist Stoltzfus is bullish on the benchmark index also because he expects corporate earnings and revenue to remain strong in 2024.

Cyclical stocks in technology, consumer discretionary, and communications services, in particular, will perform well in the coming year, he added.