Stock market outlook: S&P 500 could gain 18% if inflation keeps cooling

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Stocks could rise 18% this year as long as inflation keeps coming down and the Fed backs off from its aggressive policy, technical analyst says

Stocks could jump this year as long as inflation keeps coming down and the Federal Reserve backs off from its aggressive monetary policy, according to Piper Sandler chief market technician Craig Johnson.on Wednesday, he predicted the S&P 500 could rally to 4,625, which is about an 18% gain from the index's current levels.

But those pressures have eased in recent months, Johnson said, which could be bullish for equities. The US dollar has slipped 10% since September, and the Fed has slowed its pace of interest rate hikes as inflation continues to moderate. Those have set up stocks for a small rally in recent weeks, with the S&P 500 up 4% from the start of the year.

 

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