There’s a shift in tone happening across Wall Street.

Oppenheimer Asset Management’s chief investment strategist John Stoltzfus lifted his target on the S&P 500 index to a Street high, a day after Morgan Stanley’s Michael Wilson, one of the market’s leading doomsayers, sounded less bearish than usual.

Stoltzfus now sees the S&P 500 index hitting 4,900 by the end of the year, leaving room for another 7 per cent gain. The target would mark a new record for the gauge, and one that plays out against bearish predictions by bigwigs such as Wilson, JPMorgan Chase & Co.’s Marko Kolanovic and Bank of America Corp.’s Michael Hartnett. They were all blindsided by the resilience of the U.S. economy and the sudden emergence of the artificial intelligence-driven tech rally.

U.S. equities have soared this year as investors looked past the earnings recession, growing confident that the economy would avoid any serious slowdown while anticipating less hawkish monetary policy. Even so, the most recent median forecast among Wall Street strategists tracked by Bloomberg still showed a decline for the index by year-end.

“A broadening of the rally across S&P 500 sectors suggests that the bull market that emerged from the October 2022 lows has legs to run higher into 2024,” Stoltzfus said. He correctly predicted U.S. stocks would rally in October last year, when he remained bullish on equities amid resilient economic fundamentals, though the S&P 500 ended 2022 slightly lower than his target for that year.

“The Fed’s rate cycle now appears to be closer to a pause or an end than it has been since March of 2022,” Stoltzfus said. The S&P 500 would end the year about 28 per cent higher if Stoltzfus’s prediction materializes, which would be the best performance since 2019 — when U.S. stocks were tracking the same path as they are now, according to Morgan Stanley’s Wilson.

Meanwhile, Citigroup Inc. strategist Scott Chronert also shifted to the bull camp as he raised his target to reflect the increased probability of a soft landing. That came just one month after he said the S&P 500 rally will run out of steam.

“The near-term hurdles we envisioned headed into the third quarter are now behind,” Chronert wrote in note to clients late Friday. “No doubt, these new targets will be perceived as chasing the year-to-date move in the S&P 500.”

The rally this year has been such that the bear market that engulfed the S&P 500 is a mere 230 points from being completely erased. And if the index completes a round trip by September, it will make a full recovery twice as fast as the average of the previous 12 cycles, data compiled by Bloomberg shows.

In recent weeks, Wilson has acknowledged that he was wrong in his call for 2023. Still, he’s stuck to his year-end target for the S&P 500 of 3,900, implying a 15 per cent drop from where it’s currently trading at around 4,590.

Kolanovic at JPMorgan, meanwhile, said the defiant run in equity markets on bets of continued economic expansion and imminent interest rate cuts by global central banks is at best wishful thinking.

“We remain skeptical of this outcome, anticipating the inflation decline to prove incomplete, leaving restrictive policies in place that should increase private sector vulnerabilities and end the global expansion,” the chief market strategist wrote.