After the sharp rise in US stocks, is a pullback still the best buying opportunity?

Yesterday, boosted by CPI data, the US stock market surged, changing the recent sluggish trend. Over the past two years, the US stock market has continued to reach new highs, with many investors missing out on opportunities. However, in 2025, they may have a good opportunity to "get on board". Wall Street still believes that the US stock market will continue to rise, but the rate of increase will not be as fast as in the past few years, providing investors with plenty of opportunities to buy on dips. Senior Global Market Strategist at Wells Fargo, Scott Wren, stated that he believes the market is heading towards an "opportunity zone" this year. The bank predicts that the S&P 500 index will be between 6500 and 6700 points by the end of this year, indicating a 13% increase from current levels. Wren stated in a report on Wednesday that investors should be prepared to take advantage of any market pullbacks. Wren said, "Therefore, we tend to use such pullbacks to gradually reposition cash and short-term instruments into stock positions. In the coming weeks and months, there are likely to be more attractive entry points in stocks and fixed income. We hope to be prepared." Due to concerns among investors that some of US President Donald Trump's economic policies may trigger new inflation pressures and keep interest rates high for longer, the US stock market has seen declines in recent weeks. However, new inflation data released on Wednesday relieved investors, showing that core inflation in December was slightly lower than expected. This data strengthened investor hopes for rate cuts, with the market still expecting the Federal Reserve to cut rates once or twice this year. Meanwhile, Nationwide's Chief Market Strategist, Mark Hackett, believes that the US stock market is still supported by strong fundamentals. Hackett stated that the US economy is expected to avoid a recession in 2025, and the rise of strong tech stocks will continue to support the entire market. Hackett, referring to the sell-off in US stocks after reaching historic highs in December, said, "Market adjustments are a normal part of the cycle, occurring roughly every 18 months, and we should have one. We saw an average 8% correction in S&P 500 constituent stocks after a strong year, which was a natural adjustment." He added, "This is a typical case of a market being forward-looking and self-correcting - healthy, expected, and ultimately beneficial for long-term market stability." Adam Turnquist, Chief Technical Strategist at LPL Financial, also stated that despite recent "technical losses" in the S&P 500 index and the possibility of further declines, the stock market is still showing positive momentum. Turnquist stated that strong expectations for corporate profit growth and continued enthusiasm for artificial intelligence may help drive the market higher. He added that the market also expects Trump to implement policies to promote economic growth, although some of his agenda may raise inflation and increase the deficit. Turnquist said, "Overall, technical analysis suggests that the recent pullback may not be over. However, the ray of hope brought by a deeper correction is that it may provide a potential buying opportunity to re-enter a bull market, especially since the S&P 500 index is still above its long-term uptrend, led mainly by cyclical stocks." Despite the S&P 500 index rising by over 20% for two consecutive years, Wall Street generally expects the stock market to continue to rise in 2025. The average year-end target for the benchmark index is 6539 points, 8% higher than the current level.