Huge uncertainty! U.S. stocks have already reached the "ceiling"?

Market veteran Ed Yardeni stated that U.S. stocks may currently be hitting a "ceiling." The long-time investor and president of Yardeni Research indicated that due to the strong U.S. economy and concerning federal debt outlook, he believes there is limited room for the Federal Reserve to cut interest rates. In a recent report to clients, he noted that this means further policy easing may not occur until 2025, and the S&P 500 index could remain around 5,800 points by the end of this year. This suggests that the benchmark index will grow by less than 1% in the next two months. Yardeni mentioned that since the Federal Reserve made significant interest rate cuts in September, U.S. stocks have been "treading water." Since the last policy meeting of the Federal Reserve, the S&P 500 index has risen by 2%, and the S&P 500 Equal Weight Index has increased by 3.8%. Yardeni wrote, "We expect the stock market may continue to do this for the remainder of the year, hovering around 5,800 points. After the election, the outlook for fiscal policy may remain unsettling, and the Federal Reserve may not lower the federal funds rate at all for the remainder of this year." Yardeni pointed to the recent strong economic data, indicating that the Federal Reserve may not further cut rates in its meetings this week or in December. Among these, the U.S. real GDP growth in the third quarter was strong, increasing by 2.8% year-on-year. Business investment in equipment grew by 11% in the third quarter, following nearly 10% growth in the previous quarter. According to the U.S. Bureau of Economic Analysis, investment in information processing equipment reached a historic high. The weak job market has raised concerns among some investors, as U.S. job additions in October were far below expectations. However, analysts noted that the weakness in the labor market is at least partly due to union strikes and events like Hurricane Helen and Hurricane Milton. Importantly, the unemployment rate remained close to historical lows at 4.1% last month. Yardeni added, "The bond market agrees with our view that the Federal Reserve is cutting rates too early and too aggressively." He pointed to the recent rise in U.S. Treasury yields, indicating that bond investors have higher expectations for interest rates. Meanwhile, government borrowing may increase in the coming months, economists say this factor could indirectly push up inflation, thereby limiting the Federal Reserve's ability to cut rates. Yardeni stated, "What can we expect when the debt ceiling suspension period ends on January 2 next year? A divided government may force the Treasury to take unconventional measures (as it did early last year) to fund the government while Congress debates the increasing debt ceiling. The bond market may need a debt crisis to curb Washington's fiscal deficit." Yardeni had previously warned clients that the Federal Reserve may not cut rates again in 2024. However, according to the CME Group's FedWatch Tool, most investors expect the Federal Reserve to cut rates by 25 basis points this week and to do so by the same amount in December. Some forecasters even believe that the Federal Reserve will implement another significant rate cut this year, as the labor market may be weaker than it appears on the surface