S&P 500 may continue to rise until 2028 - Bank of America

market bull and bear on blue financial background

Bank of America predicts that the S&P 500 will reach 6,000 by 2026.

The chart's long-term technical patterns indicate that the stock market will continue to grow.

The "presidential cycle" in the United States is in favor of increasing stock indices.

Bank of America (BofA) expects that the S&P 500 stock index may rise this year and reach 5,000 points next year, surpassing record highs. They anticipate an upside potential of over 13% from current levels.

RBC, citing Business Insider, notes that the bull market in stocks that began in 2013 has similar dynamics to those seen in the 1950s and 1980s.

BofA technical analyst Steven Suttmyer noted that the 24% increase of the S&P 500 from its October 2022 low is comparable to the index's growth cycles from 1950-1966 and 1980-2000, thus making the current bull market similar to the one from 2013.

Suttmeier predicts that the S&P 500 index could reach the 6000 level by 2026, with an estimated 36% growth over the next three years. He also suggests that the growth of the index may continue until at least 2028.

The "presidential cycle" in the United States, which demonstrates the connection between stock market performance and a four-year term of the presidency, is in favor of the growth of stock indices.

Historically, the third year of a presidential term is often the strongest for the stock market, while the fourth year also tends to show good performance.

Jeremy Grantham, the billionaire and founder of the GMO fund, has acknowledged the potential for a crash in the US stock market in the coming years. The renowned Wall Street "bear" has estimated the likelihood of this happening to be 70%.

Grantham revised his forecast from implying an 85% chance of a market crash following the tech companies rally to a lower percentage. He noted the similarities between the current market and the market crashes of 1929, 2000 and 2008.