According to Wells Fargo analysts, the US stock market is expected to remain in a lull leading up to the presidential elections in November. However, investors are recommended to stay vigilant because the market might catch speculators off-guard, although experts anticipate neither sharp spikes nor declines. The key is to keep calm.

Wells Fargo defines the current situation as a “stagnation zone”. Notably, the S&P 500 index, which tumbled by 9.7% from its peak in July to its low in August, is now fluctuating between the lower border of the 200-day moving average (5,044) and the upper border of the 50-day moving average (5,452). Experts at Wells Fargo underscore these psychologically significant levels.

At the same time, the S&P 500 remains in a bullish trend. However, analysts do not expect sudden shifts in its dynamics, highlighting factors such as the unpredictability of geopolitical conflicts, the upcoming US elections, and regular revisions of economic and financial forecasts.

In this context, Wells Fargo believes that the S&P 500 will unlikely go through a rally or take a nosedive in the coming month. They advise active speculators to look for other investment opportunities, as the market is not showing a clear trend.

Experts suggest that if the market approaches the upper border, investors might need to reduce their investments in less lucrative sectors such as emerging market stocks, real estate, consumer goods, and utilities.

Conversely, if the market moves towards the lower border, Wells Fargo advises increasing investments in US large-cap and small-cap stocks, as well as in the energy sector, telecommunications, financial and industrial companies.

Wells Fargo believes that the S&P 500 may reach the upper border of the 50-day moving average in the short term. To sum up, experts warn market participants against hasty decisions, especially in anticipation of the US presidential elections.