The broadening market rally has Bank of America forecasting further upside for the S & P 500 . Strategist Stephen Suttmeier estimates the broad market index will reach 6,150, or 8.5% higher than Tuesday’s close. Rate-sensitive sectors such as regional banks and small caps have enjoyed gains over the past week as investors become more optimistic about interest rate cuts. Month to date, the real estate, financials and consumer discretionary sectors are up by more than 4%. The Russell 2000 has surged 10.5% in July, putting it 11.7% higher year to date. “Breadth [has] improved at the index level, with the Russell 2000 (IWM), NYSE (NYA), and Dow Jones Industrial Average (INDU) also breaking out to new highs to suggest that the summer 2024 rally is getting healthier,” Suttmeier wrote in a Tuesday note. The broad market index has already reached the 5,600 level on the bullish cup and handle chart pattern, which traders view as a bullish signal indicating a continuation to upside. Suttmeier said the S & P 500’s broadening market rally participation supports more upside potential to the 6,150 level. In addition, the strategist said the number of S & P 500 stocks trading above their 50-day and 200-day moving averages has improved to indicate stabilizing market breadth. .SPX YTD mountain S & P 500 in 2024 Suttmeier believes the iShares Russell 2000 ETF , which tracks the benchmark small cap index, can break out to as high as 260. IWM YTD mountain IWM ETF in 2024 —CNBC’s Michael Bloom contributed to this report.
