The S&P 500 rose 15% in the first half of 2024, touching a new all-time high of 5,487 in late June.
The surge was primarily driven by substantial gains in mega-cap technology stocks, especially Microsoft (NASDAQ:MSFT), Nvidia (NASDAQ:NVDA), Apple (NASDAQ:AAPL), Google (NASDAQ:GOOGL), Amazon (NASDAQ:AMZN), and Meta (NASDAQ:META), which collectively accounted for 62% of the index's return, according to Goldman Sachs’s note.
The report notes that while the equal-weight S&P 500 returned 5%, the main contributors to the year-to-date return included better earnings expectations, a 7% expansion in the forward price-to-earnings (P/E) multiple to 21x, and dividends.
Among sectors, Information Technology emerged as the leading driver with a 28% gain, whereas Real Estate was the poorest performer with a 2% decline.
Investors particularly favored stocks with exposure to artificial intelligence (AI), with AI infrastructure stocks rising by 32%, and Utilities seeing a 9% increase.
“By the end of 2024, we expect the index will rise to 5600 as the P/E multiple contracts slightly from its current level and EPS grows by 8% relative to 2023,” Goldman Sachs strategists said.
That S&P 500 year-end target implies a potential upside of around 2.3% from current levels.