S&P 500 Soars Over 10% in Q1, But Analysts Forecast Slowdown Ahead Due to Inflation and Rates
• The S&P 500 climbed over 10% in Q1 2024, something it has only done 11 times before since 1957. Historically after such gains, the index has averaged 7.5% returns over the next 12 months.
• However, many Wall Street analysts forecast the S&P 500 declining by year-end 2024 due to expected slowdowns in consumer spending and economic growth.
• High inflation, diminished consumer savings and rising interest rates could reduce discretionary spending, which drives much of GDP growth.
• The S&P 500's historically high valuation ratios suggest a potential correction ahead after the strong Q1 performance.
• Despite near-term uncertainty, the S&P 500 has delivered 10.6% annualized returns over the past 30 years across various market environments.