The chances of a market correction are creeping up as the tech-led 2024 rally fades into year-end, according to Jeremy Siegel, professor emeritus of finance at the University of Pennsylvania’s Wharton School of Business. “I really think we’re going to take a pause this next year,” Siegel said Monday on CNBC’s ” Squawk on the Street .” “I think there might be some disappointment, as time has gone on. I think the probability of a correction next year, which is defined as a 10% drop in the S & P, is getting higher. … the major forces to propel things upward I think have already been built in.” .SPX YTD mountain S & P 500 With the sell-off into the end of the year, the S & P 500 is now more than 3% off its record high from Dec. 6. However, the index is still up 23% in 2024, on pace for its best yearly performance since 2021 and its fifth positive year in six. Stocks got a boost from Donald Trump ‘s presidential election win as investors bet that his promises of tax cuts and deregulation will propel growth and benefit risk assets. Siegel pointed out that this would mark the second time in history that the S & P 500 rallied more than 20% for two straight years. The first time was 1998 and 1999, followed by the dot-com bubble burst in 2000, he said. The widely followed professor thinks there could be some disappointment surrounding the implementation of artificial intelligence, the hottest investing trend of the last two years. “The amount of actual gains it’s bringing about is modest. It hasn’t been implemented completely at so many firms. The hope is there, and I think ultimately it will prove to be very beneficial, but there is room for disappointment at the speed of implementation and how much that actually will affect profits,” Siegel said.
