The Blubber

The S&P 500 could soar another 18% by year-end, as the economy is strong and the Fed is likely to end its rate hike cycle, per Oppenheimer.

According to John Stoltzfus, the chief investment strategist at Oppenheimer, the S&P 500 is on track for a substantial rally by the year's end. Stoltzfus spoke with CNBC and reaffirmed his year-end S&P 500 price target of 4,900. This forecast implies an impressive 18% surge in the benchmark index in just over two months. The basis for this projection is the Federal Reserve's anticipated conclusion of its cycle of interest rate hikes.

"When we initially set this target, our expectation was that the Fed would remain vigilant against inflation while being attentive to the economic impacts of its policies, and it has adhered to that path," Stoltzfus noted.

Since March 2022, central bankers have been actively increasing interest rates to combat inflation, with the fed funds rate currently ranging from 5.25% to 5.5%. Concerns have arisen that the Fed's assertive approach might potentially drive the U.S. into a recession. Nevertheless, the economy has remarkably maintained its resilience, with a 4.9% growth in GDP during the third quarter.

Despite some underwhelming results from major tech companies this week, corporate earnings appear to have stayed robust. Data from FactSet reveals that, out of the 17% of S&P 500 firms that reported third-quarter earnings last week, 73% have exceeded analysts' projections.

In recent weeks, stock markets have experienced a decline, primarily due to concerns related to rising Treasury yields. The yield on the 10-year U.S. Treasury note recently crossed 5% for the first time since 2007. However, Stoltzfus emphasized that yields around 5% are historically within a normal range.