A strategist who previously predicted a rebound in the US stock market in the first half of the year now believes that the S&P 500 index will remain stagnant.

According to the Zhongtong Finance APP, a Wall Street prophet who predicted a rebound in the stock market in the first half of this year said not to expect a significant increase in the US stock market anytime soon.

Barry Bannister, Chief Equity Strategist at Stifel, said that the S&P 500 index peaked in July and is unlikely to break through around 4,000 points in the next six months due to rising interest rates affecting corporate profit growth. On Monday, the benchmark US stock index rose slightly, hovering above the key technical level of 4,200 points, while the 10-year US Treasury yield broke 5% for the first time since 2007.

In a report to clients on Monday, Bannister wrote, "We believe that the S&P 500 index will peak in the summer of 2023 and reach around 4,400 points by April 2024." He previously predicted that the stock market would reach this level by the end of December.

Bannister believes that the current cycle will see the US Treasury yield break around 5%, but he expects the normal yield on 10-year Treasury bonds to reach 6% by the mid-2020s, stating, "This is not 'the Fed being in a high position for a long time' - the Fed has returned to 'adjusting policy with normal interest rates'."

It is understood that in recent months, the strong gains in the first half of this year have been eroded against the backdrop of turbulence in the bond market, and the US stock market has plummeted, with concerns that continued rate hikes will undermine economic growth. In the past few weeks, concerns about US consumer purchasing power and new geopolitical risks from the Middle East conflict have further dampened investor sentiment. Last Friday, the S&P 500 index fell below the 200-day moving average for the first time since March.

It is worth mentioning that Bannister is one of the few bearish forecasters who accurately predicted a rebound in the US stock market in the first half of 2023, and he subsequently stated that the gains in the second half of this year would stagnate, a prediction that is currently playing out. The strategist also believes that the US stock market has almost no upside potential for the remaining decade, as tightening US financial conditions hinder the price-to-earnings ratios of US companies.

Bannister said, "Our motto has always been 'we are all traders now' because the S&P 500 index may be flat or highly volatile in the 2020s." He added that the US stock market is in the "fourth long bear market of the past century".

However, for Wall Street prophets, this year's chaotic stock market has overturned traditional wisdom. In the first half of this year, strategists were caught off guard by the resilience of the US economy, the recovery of corporate profits, and the AI frenzy driving the rise of technology stocks. Just as many were forced to change their pessimistic views this summer, the US stock market began to lose momentum. Now, with just over two months left in 2023, market participants are feeling uneasy. Strategists from companies like Goldman Sachs and Deutsche Bank believe that corporate earnings reports could push the S&P 500 index higher by the end of the year, while bears like Morgan Stanley's Michael Wilson believe that the US stock market will further decline.

Lori Calvasina of RBC Capital Markets LLC said on Monday, "The outlook has become more uncertain, and we believe that the pause in the rebound of the S&P 500 index is not yet over."