Is the equity market really back to square one?

While the S&P 500 is now nearly back to its all-time high in the wake of Fed Chair Powell’s dovish message at Jackson Hole, underlying risk premia are still somewhat larger than before the July correction began and the previously all-conquering “AI” narrative still is yet to fully recover. Provided that the US economy manages a soft landing, as we continue to anticipate, and enthusiasm around AI rebounds further, we forecast the S&P 500 will hit 6,000 by the end of the year.