Investors could finally see the 2023 rally broadening in a meaningful way in 2024, though the gains may not be as impressive after the year Wall Street just had. The S & P 500 is up 24% year to date, trading just below its record close of 4,796.56 set in January 2022. The Dow Jones Industrial Average hit an all-time high in December and is up more than 13% for the year. The Nasdaq Composite, meanwhile, surged 43% in 2023. Despite the strong gains this year, it has been a frustrating time for some on the Street. While many strategists urged caution coming into 2023, a handful of artificial intelligence names managed to power the major benchmarks to double-digit advances. Many also anticipated a recession of some sort, but the U.S. economy this year largely shrugged off those concerns, held up by a consumer shelling out for Taylor Swift tickets and other experiences. Now, investors seem to have more reasons to be optimistic. Inflation appears to be easing, the Federal Reserve has signaled three rate cuts could come in 2024, Treasury yields are falling from their highs, and the rally defined by Nvidia and the rest of the Magnificent Seven for much of this year is getting some participation from other names. “We are super bulled up about the market next year,” said Jay Hatfield, chief executive officer at Infrastructure Capital Management. “We’re calling it the year of the global rate cut.” A ‘good shot’ there’s upside Hatfield has a 5,500 target for the S & P 500 that implies upside of 15% next year. When pressed for any concerns he might have about his outlook, he said the risk is to the upside. His outlook for next year incorporates 2025 earnings expectations, as well as falling Treasury yields. “Our target for the 10-year [Treasury yield] is between 3% and 3.5%. And our target on the stock market only assumes 3.5%,” Hatfield said. “So there’s another, you know, 500 points of upside if we got to 3%.” Treasury yields rattled equities earlier this year, after the 10-year Treasury yield surged to above 5%. However, it was last below 3.9%. He’s not the only one who holds such a bullish view. Bokeh Capital Partners’ Kim Forrest said stocks have a “good shot once again” of being 10% to 15% higher at the end of next year. She noted that falling commodities prices will lift corporate earnings more than investors are anticipating. “[Commodities are] the input for a lot of companies,” Forrest said. “I think we have a good chance for earnings to grow even without a whole lot of revenue growth.” Commodity prices such as oil, for example, have been on the decline. Oil posted its first annual decline in two years, ending 2023 about 10% lower amid worries over global economic growth. The broadening rally: A year for value One view generally accepted on Wall Street is that the market rally will broaden further in 2024, though investors differ on which parts will lead. Some expect the rate cuts will mean growth names will outperform, especially names in tech that have further upside. Others forecast that leadership will rotate more to value names. Ariel Investments’ John Rogers told CNBC’s Scott Wapner in November he expects the “top of growth stocks is coming.” In fact, even if growth stocks continue to outperform in a falling interest rate environment, he said the gap between growth and value is so large there will likely be some big winners overlooked by growth investors. Year to date, the Russell 2000 has lagged the S & P 500, up 15%. The equal-weighted S & P 500 has lagged even further, up about 12%. But recently, stock participation has expanded: In December, the Russell 2000 jumped 12%, compared to a 4% rise in the S & P 500, showing more investors are bullish on small- and mid-cap stocks after their underperformance. .RUT YTD mountain Russell 2000 in 2023 “Each time growth keeps on outperforming value, we’ll want to take money away from growth and allocate it to value,” Olivier Sarfati, head of equities at GenTrust, said in November. Sarfati said he’s bullish on biotech stocks, saying they’re extremely cheap after their underperformance; the Invesco Nasdaq Biotechnology ETF (IBBQ) is up by about 4% in 2023. He noted that many pharmaceutical giants still have plenty of cash on their balance sheets to scoop up some promising names in the sector. “I don’t think valuation tells you anything about future performance, except when it’s an extreme,” Sarfati said. “And I’d say those valuations are close to an extreme on the downside.” Meanwhile, Ariel Investments’ Rogers is bullish on stocks tied to the housing sector, such as home security company ADT , which is down more than 24% this year, and flooring company Mohawk Industries that’s up 1%. Financials have also attracted interest. In December, Fairlead Strategies’ Katie Stockton moved financials to an overweight recommendation, saying banks are showing promise after their decline this year. “Financials having such a huge footprint in the S & P 500, if they participate and lead even on the upside, well that’s what could get the market out of this big wide long-term trading range,” Stockton said. Financials underperformed in 2023. The S & P 500 sector is up roughly 10% this year. But others expect that tech stocks will continue to lead, though they expect participation in the sector will broaden out from the mega-caps. Oppenheimer’s Ari Wald, for example, approves of mid-cap growth names in cloud and cybersecurity. Broadly speaking, what might be most important for investors in 2024 is a balanced portfolio. A note from Merrill, a Bank of America company, for example, read its chief investment office expects a long rotation in 2024 into laggards. The team has a slight preference for value names over growth names. “Our portfolio strategy remains ‘balanced’ while fully invested to start the year, as we believe that adjustments below the surface in terms of Value and Growth, Small- and Mid-capitalization shares versus Large-capitalization, and U.S. versus non-U.S. (including Emerging Markets) are paramount in 2024.” The not-so-bullish case for 2024 Not everyone is so confident about next year’s outlook. Market bears expect the “goldilocks” scenario of a soft landing will be harder to achieve than investors expect, and they say a downturn is still at hand. They think the cumulative impact of rate increases will make their impact felt in the economy. “My expectation is that something is going to break in the system,” Komal Sri-Kumar, president at Sri-Kumar Global Strategies told CNBC’s ” Money Movers ” on Tuesday. Sell-side strategists in general also see muted gains from here. According to the consensus target from the 2024 CNBC Strategist Survey , market observers on average expect the S & P 500 to end next year at 4,881. That’s a new all-time high for the S & P 500, but represents just a 2% rise from Friday’s close. JPMorgan’s Dubravko Lakos-Bujas holds a more bearish forecast. His 2024 year-end target of 4,200 for the S & P 500 implies stocks will end next year roughly 12% lower. He’s expecting poor earnings will weigh on stock valuations. “We expect a more challenging macro backdrop for stocks next year with softening consumer trends at a time when investor positioning and sentiment have mostly reversed,” Lakos-Bujas wrote. The first major test for investors during the new year will take place Friday, when the Labor Department releases the December U.S. jobs report. According to FactSet, economists expect the U.S. economy added 155,000 jobs for the month. — CNBC’s Michael Bloom and Fred Imbert contributed to this report.