WHERE TO INVEST NOW

Expect a lot of midyear churn, with a rally toward the end of 2024.

- ANNE KATES SMITH

THE start of 2024 is a tough act for the stock market to follow. The S&P 500 index notched 22 record highs in 2024-all before the end of the first quarter. At the market's peak on March 28, the S&P 500 was up 10% for the year and up 28% from the start of a powerful thrust that started last October. It's little wonder that the market hit a springtime speed bump, pulling back 5.5% in April before bouncing mostly back. Now, investors have to ask first whether the pullback has run its course before they consider whether the second half will deliver further gains.

We would not be surprised to see the market fall (and pick itself back up) multiple times over the next several months, within a modestly upward trajectory that delivers gains by year-end. An S&P 500 level of 5300 at year-end seems a reasonable conservative target, with 5500 at the high end of strategists' estimates. Judging by index levels alone, wrapping up at 5300 would not represent much progress beyond the first-quarter high of 5254 for the S&P 500, although it would be an 11% price gain for the year a 12.5% return including dividends. (Prices, returns and other data in this story are through April 30, unless otherwise noted.)