As the U.S. stock market experiences its strongest rebound in nearly 30 years, Wall Street strategists are raising their forecasts for the U.S. stock market.

Strategists from BMO Capital Markets, Goldman Sachs Group, and UBS have raised their year-end targets for the S&P 500 index over the past month, expecting the index to continue its upward trend. So far this year, the S&P 500 has risen by 22%.

These moves reflect the U.S. stock market's better-than-expected rise this year, as the U.S. economy and corporate profits have performed unexpectedly strongly, and investors continue to pour into technology stocks that are expected to benefit from the artificial intelligence (AI) boom. The S&P 500's gains so far this year have exceeded those of previous years since the formation of the internet bubble in 1997.

The magnitude of the gains has prompted Wall Street forecasters to scramble to raise their forecasts for the last part of 2024 - the so-called "strategists' short squeeze," similar to a situation where a rapid increase in stock prices forces traders to close their short positions. The S&P 500's 24% rise last year also caught strategists off guard.

Given that the S&P 500 index has remained above 5,800 points, UBS strategists Jonathan Golub and Patrick Palfrey raised their year-end forecast for the index from 5,600 points to 5,850 points on Tuesday, while raising their 2025 forecast from 6,000 points to 6,400 points. Although their forecast for 2024 implies that the S&P 500 will not rise further this year, they expect the index to rise by another 9% over the next 15 months. This is the fourth time UBS strategists have raised their forecast for the index since releasing their annual outlook at the end of last year.

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Earlier this month, Goldman Sachs' chief equity strategist, David Kostin, raised his year-end target for the S&P 500 index to 6,000 points. This is also his fourth forecast increase since the last few months of 2023, and among forecasters tracked by Bloomberg, his year-end forecast for the S&P 500 ranks second. BMO's Brian Belski gave the most optimistic forecast, saying in September that the index could soar to 6,100 points by the end of the year.

Strategists continue to raise their forecasts for the S&P 500 index.

Belski said when raising his forecast: "We continue to be surprised by the strong market trend, and once again decide that it is necessary to take more significant action than incremental adjustments."

This optimism comes as traders face market risks: a fiercely competitive U.S. presidential election next month, escalating geopolitical tensions in the Middle East, and uncertainty about the Federal Reserve's loose policy trajectory following last month's better-than-expected U.S. employment and inflation data. The S&P 500 index fell slightly on Tuesday, after setting a record close for the 46th time in the previous trading session.

Golub said on Tuesday: "Uncertainty about fiscal and monetary policy, as well as potential election outcomes, makes the outlook for 2025 uncertain." However, this did not stop him from betting that the stock market can continue to rise, noting that the risks tend to be upward due to slowing inflation, Federal Reserve rate cuts, improvements in low-end consumer and business activities, and strong profits.Confidence in the stock market's ability to withstand imminent uncertainty stems from experience. Many strategists have consistently underestimated the stock market's gains.

In January of this year, strategists' average year-end forecast for the S&P 500 index was 4,867 points, which is about 17% lower than the index's level on Tuesday. At the beginning of 2023, strategists' predictions were 4,050 points, which was 15% lower than the actual level at the end of that year.