A historically strong start to the year for the U.S. stock market should continue into the second half of 2024, according to JPMorgan Chase & Co.’s asset management division.

While the move may look more like a grind than a rocket ride after the S&P 500 Index’s double-digit return since January, solid earnings, the end of the Federal Reserve’s monetary-tightening campaign and economic strength will continue to lift U.S. equities in the coming months, strategists at the firm led by David Kelly wrote in their mid-year outlook report. 

“Return expectations should be more modest, but healthy earnings growth and wide valuation dispersion suggest the environment remains positive for equity performance with opportunities for alpha generation,” Kelly, JPMorgan Asset Management’s chief global strategist, and his team wrote. They recommend buying large-cap shares and a mix of value and growth stocks.

The S&P 500 swung between small gains and losses on Thursday after Fed officials laid out projections for just one interest-rate cut in 2024, fewer than traders were hoping for this year. Still, the U.S. equities benchmark remains near a record high, propelled by optimism that the central bank’s next move will be a cut, as well as the ongoing enthusiasm for artificial intelligence technology that’s fueled outsized gains in Big Tech behemoths like Nvidia Corp. and Microsoft Inc.

Kelly and his team noted that unlike last year, market strength has been accompanied by improving breadth as a broader earnings recovery helps elevate shares beyond the technology giants. Every S&P 500 sector other than real estate is higher year-to-date — last year at this time just five of the index’s 11 sectors were in the green, according to data compiled by Bloomberg.

One risk to the outlook is artificial intelligence, where just a handful of firms are driving the market’s enthusiasm and the timeline for adoption remains up in the air, the strategists wrote. Another is slowing economic growth, which could hit profit margins if corporate pricing power comes under pressure.

Still, they see those concerns as modest, unlike JPMorgan’s bearish market strategist Marko Kolanovic, who continues to sound the alarm on a potential stock market plunge. While Wall Street firms sometimes have different views under one roof, JPMorgan’s asset management arm and its trading desk led by Andrew Tyler clearly have broken from Kolanovic, who represents the bank’s house view.

“The end of monetary tightening combined with strong nominal gross domestic product growth provide a constructive backdrop for U.S. equities over the remainder of the year,” JPMorgan’s asset management strategists wrote.