By end-December, the benchmark index will be at 5,100, according to the median forecast of 40 strategists polled by Reuters during the last week and a half. That is 2.4% higher than Wednesday's close of 4,981.80.

That latest prediction was well above the 4,700 year-end level forecast in a Reuters poll in November.

The S&P 500 has risen sharply in recent months, partly fueled by the view the Fed could soon start cutting rates. The index has hit record highs this year, and is up about 4% so far for 2024 after rising 24% in 2023.

Optimism over artificial intelligence that drove a rally in technology stocks last year could be a source of support.

Shares of Nvidia jumped late on Wednesday following the chipmaker's forecast for fiscal first-quarter revenue above estimates on robust demand for its chips that dominate the market for AI. It also sparked gains in other AI hardware stocks.

Still, eight of 13 strategists who answered an additional question on whether a correction is likely in U.S. stocks over the next three months said it was likely or highly likely.

"I'm cautious at these levels and I think we're headed for some sort of pullback," said Peter Cardillo, chief market economist at Spartan Capital Securities in New York.

"That's based on the fact yields are probably going to work their way higher. The Fed is in no mood to loosen credit any time soon, so that will be a deterrent in terms of the market. Also, valuations are high."

But he and other forecasters see the market possibly rallying starting in the summer as the U.S. presidential race heats up. Cardillo expects the S&P 500 to end this year at 5,400.

On Wednesday, minutes from the Fed's January meeting showed most policymakers were concerned about the risks of cutting rates too soon, and there was broad uncertainty about how long borrowing costs should remain at their current level.

After the release of the minutes, traders of U.S. short-term interest-rate futures stuck to bets the Fed will begin cutting rates no earlier than June. A separate Reuters poll of economists published earlier this week predicted June was the most likely month the Fed would begin cutting.

Analysts expect overall S&P 500 earnings to rise 9.5% in 2024 after increasing around 4% in 2023, LSEG data showed.

But valuations have risen along with stock prices. The S&P 500's forward price-to-earnings ratio -- a commonly used metric to value stocks -- is at 20.7 times, well above the index's long-term average of 15.7, according to LSEG Datastream.

"The economy should continue to muddle along, and companies will manage costs in a way that allows for muted earnings growth," said Sameer Samana, senior global market strategist at Wells Fargo Investment Institute in Charlotte, North Carolina. Wells Fargo sees the S&P 500 ending this year at 4,900.

Based on the poll, the Dow Jones industrial average will finish this year at 41,600, up 7.7% from Wednesday's close. The Dow is up 2.4% so far in 2024.

(Other stories from the Reuters global stock markets poll package:)

(Reporting by Caroline Valetkevitch; additional reporting by Chuck Mikolajczak, Sinead Carew and Stephen Culp in New York and Noel Randewich in San Francisco; additional polling by Sarupya Ganguly and Sujith Pai in Bengaluru; Editing by Bernadette Baum)

By Caroline Valetkevitch