S&P 500 (SPX) Forecast for 2023, 2024, 2025-2030 | PrimeXBT (2024)

Many traders like to look at major stock indices when they come to trading as the idea of an index is that it groups some of the bigger, better, and more well-performing together so that their gains are spread across, and their losses are mitigated somewhat.

One of the most popular stock exchange indexes is the S&P 500. This is a stock market index that measures the stock performance of 500 large companies listed on stock exchanges in the United States. It is one of the most commonly followed equity indices, and many consider it to be one of the best representations of the U.S. stock market.

Because of this, the S&P 500 is often followed to determine the health of the stock markets in the USA, but globally as well seeing as many of the companies in the 500 have a strong influence over the global markets. The reason why this index is such a powerful one is that the companies involved have a huge sway on the market, but it is usually in an upward trend, which is positive for investors.

S&P 500 Overview

S&P 500 Historical Overview

The S&P 500 has become a popular investing index since its initiation in 1957. It was introduced by Standard & Poor’s in 1957 as a stock market index to track the value of 500 large corporations listed on the New York Stock Exchange (NYSE) and the NASDAQ Composite. In this sense, it became a bigger barometer of the overall health of the US economy than the Dow Jones Industrial Average.

What the history of this index shows is that because it is somewhat of a representation of the health of the American economy and space, it is often influenced by factors that affect the entire country. For example, during its first 10 years, the value of the index rose to nearly 700 points, reflecting the economic boom that followed World War II.

But, from 1969 to early 1981, the index gradually declined where it fell to a point under 300 with the US economy struggling with stagnant growth and high inflation.

So, this index really is a bit of a bellwether of the US economy and this is important to note because when things are going well for America, the index will be higher, but if the opposite happens, things can go the other way.

The index opened at 386.36 points and as explained it has risen to over 700 points after the war, and slumped back down again in economic stagnation. But, from 1982 to 2000, stock market prices rose and the S&P 500 climbed 1,350%. The factors that contributed to the rise in stock prices were things like interest rates trending lower, strong global economic growth as a result of increasing levels of globalization, a rise in the middle class, technological innovations, a stable political climate, and falling commodity prices.

Top Factors That Impact S&P 500 In 2023 & In Future

It is probably a good time to delve deeper into the factors that have been known to influence the S&P 500 as we have come to the understanding that what is bad for the US economy is bad for the index, but there is a lot more to it than that.

The stock markets are easily influenced by negative and positive news as these impact the companies involved in the market and their possibility of being profitable. So, there are three key factors in just the last year or so that have made major impacts on the charts.

The Federal Reserve, which is the department that controls the money, and basically the economy, can have a huge role to play in the way the stock markets move. Through 2020, the Fed started taking a patient, dovish stance, which meant that interest rates were halted, then lowered.

That being said, during 2022 the inflation numbers in the United States started to get out of hand, right along with the rest of the world. The central bank started to raise interest rates quite aggressively, as they need to bring down demand. While initially believing that inflation was “transitory”, the labor market in the United States has shown that companies are still hiring hand over fist, which drives up demand and therefore inflation.

Part of the problem was the massive amount of liquidity added to the system during the COVID-19 panic. The central bank did quite a bit of quantitative easing to prop up the economic markets, and now all of that liquidity is starting to be seen in the form of inflation as there is too much money chasing far too little goods.

While lower interest rates will quite often send money chasing stocks for higher returns, higher interest rates have the exact opposite effect on not only the S&P 500, but the Dow Jones Industrial Average, and all of the other major indices. Most traders will simply forgo taking the risk of the stock market in order to stick with a guaranteed return in the bond market if rates are high enough.

S&P 500 Forecast for 2023-2024

Any S&P 500 price forecast for 2023 is going to have to be taken with a lot of concern, as there are a lot of moving pieces. The first 3 months of the year have been very tough, but past performance should be kept in the back of your mind.

The S&P 500 has generally done well for investors over the longer term, but it should be remembered that the last 14 years have been years in which we’ve seen a lot of stimulus coming from the Federal Reserve. As long as interest rates remain very weak, it does make quite a bit of sense that “There is no other alternative” for US investors to make money. However, the financial situation has most certainly changed, as the Federal Reserve has recently started to tighten monetary policy.

Previously, we had seen growth stocks perform very well, as cheap money tends to find its way into startups and countries that are growing rapidly. However, we have since seen a bear market enter the psyche of traders, and as those who had been chasing “easy money” started losing money.

Tom Lee, Head of Investments at Fundstrat Advisors has stated that although the S&P 500 has had a rough beginning to the year 2023, the reality is that sooner or later the Federal Reserve may have to change its monetary policy, and that could kick off a rally, which he anticipates to really start to pick up steam in the third quarter. After all, rising interest rates had been one of the killers of stock markets in late 2022, so if rates start to drop, it’s possible that we will go back to seeing a lot of money flowing into the equity markets. He is currently calling for a move to the 4200 level, after initial bearish pressure for the year.

Jim Cramer, widely followed host of CNBC, has a S&P 500 price forecast for 2023 of 4100, as he believes sooner or later the economic data and the corporate earnings coming out of Wall Street will force the Federal Reserve to turn and start loosening monetary policy.

Things could be starting to change though, as the banking system has seen quite a bit of stress. The economic outlook is starting to sour a bit, and therefore the market may enter a “bad news is good news” phase again, as we have seen multiple times after the Great Financial Crisis, where traders only care about liquidity. Long gone are the days of worrying about corporate earnings or earnings growth. (At least from the longer-term point of view.)

S&P 500 Forecast for 2025 And Beyond

A S&P 500 price forecast for 2025 needs to take a lot of moving pieces into account. During the early part of 2023, we are seeing a lot of crosswinds due to geopolitical issues, especially the Ukrainian war. Furthermore, supply chains had been broken, and therefore caused mass inflation. This being the case, it caused the Federal Reserve to change its economic outlook, and started to tighten monetary policy as inflation was in danger of getting out of hand.

Going forward, economic data will be looked at quite closely and parsed multiple times in order to make trading decisions, but it’s more likely than not that the year 2025 will have already seen some type of crisis come and go, and therefore it does make a lot of sense that we will eventually see bullish pressure in the year.

As we go further into the future, there will obviously be new crises, as the boom and bust cycle continues to shrink. That being said, it is quite common to see extremes every couple of years.

Future S&P 500 Predictions

Looking beyond 2023, there is bound to be some real movements in the stock markets as volatility is increasing.

S&P Predictions For Next 5 Years (Until 2028)

It is assumed that the S&P 500 will continue to rally going forward, but the reality is that it’s very difficult to predict the unknown. After all, who could have predicted a global pandemic that caused so much havoc in the market? Nonetheless, it does tend to rise over time and there’s no reason to believe that it will be any different.

The S&P 500 continues to attract a lot of inflow around the world, as it is one of the more mature markets. It is generally trusted well beyond many other stock indices around the world, so therefore it’s one of the first ones to move in either direction.

It is likely that looking at the charts could give us a bit of a heads up, and it does seem like the pullback in 2023 has been very strong. Whether or not there is further downside to go remains to be seen, but history tells us that the market does eventually turn around and go higher. One would have to assume that by the time we get to 2028, we will have easily made a fresh, new high.

Looking at the charts, the pullback for the parish market of 2023 is nothing out of the ordinary, so unless we get some type of significant change in the global economic outlook, one would think that the buyers will certainly return and perhaps in this market much higher, perhaps trying to go as high as 5000 over the next couple of years.

In fact, some pundits believe that the S&P 500 will be as high as 10,000 by the time we get to 2028. A lot of what could be a major determinant to that being the case is whether or not the US dollar loses a lot of strength.

S&P 500 10 Years Forecast (Until 2032)

Since 1947, the S&P 500 has produced roughly 8% annual gains, suggesting the current environment may be a historically bad entry point for investors. In terms of a price target, Bank of America is targeting S&P 500 5,150 to 8,700 with its S&P 500 price forecast for 2030, but it is worth noting that some others are calling for a move as high as 10,000 by the time we get to 2032.

Summary: What is the future of the S&P 500

While things seem relatively poor for the S&P 500 as things stand because both the markets and the economy are in a position that is not very fruitful for growth, there is a positive side to it. The drop seen in the market correlates to the impact on the economy, but the pandemic is already showing signs of letting up and recovering and this will mean a return to strength for the S&P 500.

The knowledge that the economy, and the markets, will recover is almost universally felt, the time it takes and how well it recovers is another thing, but for many traders this represents a perfect time to enter the market and take advantage of the probable upswing in the coming months, if not years.

In order to take advantage of the lows that the market are currently going through and the expected return to new highs after the pandemic, it is a good time to find a platform that offers you the chance to trade the S&P 500 — such as PrimeXBT: you can sign up here