'I don't see this stopping anytime soon': The stock market is headed toward new highs, says finance professor Jeremy Siegel. Here's why

He’s not alone. Bank of America also recently predicted that the S&P 500 could soar this year.

Here’s why the pendulum of Wall Street’s sentiment has swung from pessimism to optimism in the eyes of some.

Better-than-expected results

The recent shift in sentiment seems to be driven by fundamentals. At least according to Siegel.

"This is such a strong market,,” he said on CNBC’s Closing Bell recently. “Lower inflation and stronger economy and good guidance and good profits — what's to stop this market now?"

Siegel says the strength of recent economic data and earnings results was surprising even to him.

“I was worried about what was going to become of the economy in the second half [of the year],” he said. “And I'll tell you … I don't know anyone who thought that [GDP in] the first half would grow faster than 2%. … Even the Fed was way below that in its estimate.”

But that’s exactly what happened: GDP increased at an annual rate of 2% in the first quarter of 2023 and 2.4% in the second quarter, according to the federal government’s estimates.

Given the strength of that all-important macroeconomic indicator, and given that inflation slowed in June to 3%, its lowest level in years, Siegel says he has no reason to believe that strong growth in the stock market will be abated.

“I don’t see this stopping anytime soon," he said.