History indicates that after big bear market declines, strong bull markets usually follow with gains carrying into a second year. Still, the first year’s comeback rally is usually hard to top, while the second year of a new bull market is prone to pullbacks with an average drawdown of 10%, LPL said.
"After an 80% rebound in equity prices since the lows of March 2020, it is fair to suggest that much of the good news is getting priced in and the upside potential becomes more limited from here," Tobias Levkovich, chief U.S. equity strategist at Citi, said in a note.
Wall Street's consensus year-end target for the S&P 500 stands at 4,099, calling for just a 4% gain from here, according to the CNBC Market Strategist Survey that rounds up 15 top strategists' forecasts.
On Tuesday, stocks tied directly to an economic recovery like airlines and cruise operators led the losses amid rising new coronavirus cases abroad and in about half of all U.S. states. The major averages all finished the day in the red on concerns about hiccups in the global economic reopening.
