The benchmark S&P 500 index is expected to end the year 5% higher than where it was at the close of 2022, according to a new poll by the Reuters News Agency.
Previously, the S&P 500 index was seen ending 2023 at 4,200 points, which would be a 9.4% increase on the year. However, those expectations have now been revised lower according to the latest poll of 42 analysts and economists.
After pulling back 19.4% in 2022, the S&P 500 index has gained 4.1% so far this year. However, the index has declined 0.56% so far in February amid volatile trading following a strong rally in January of this year.
More than 70% of analysts polled said there is a high probability of a correction in U.S. equity markets in the next three months, though a majority see the market stabilizing in the year’s second half.
The S&P 500 is currently trading at 18.5 times expectations for earnings over the next 12 months compared with its average forward P/E ratio of 15.8 observed in the last 20 years, according to Refinitiv data.
Wall Street's expectation for S&P earnings growth this year has dropped to 1.6% from an earlier forecast of 4.4%.
Poll respondents were evenly divided on whether growth or value stocks will perform better on U.S. markets this year.
Due to ongoing volatility, the Dow Jones Industrial Average, another bellwether American stock market, has given up all of its gains for 2023 and is now flat on the year.
