U.S. stocks just reached another market milestone. Here’s how the S&P 500 could climb even higher.

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The S&P 500 index reached 4,500 on Thursday for the first time in more than 15 months. It’s the latest milestone that has Wall Street’s equity bulls taking a victory lap. Ed Yardeni, founder and president of Yardeni Research, correctly anticipated that the S&P 500’s closing low from Oct. 12 would mark a durable bottom. He reaffirmed his year-end target of 4,600 during an email exchange with MarketWatch on Thursday. But if the market gets there early, he could raise his target even higher, a prospect he also discussed during an appearance on Bloomberg TV. “My year-end target has been 4,600 since the start of this year. If it gets there ahead of schedule, I will probably raise my target to 4800 for the end of this year,” he said. Right now, it looks like the market will indeed reach his target in the not-too-distant future, according to Julius de Kempenaer, the senior technical analyst at StockCharts.com. He told MarketWatch that he doesn’t expect the market to face much resistance until 4,600. Why is he so optimistic? De Kempenaer pointed to signs that the rally in U.S. stocks has broadened dramatically over the past month as cyclical areas of the market, like industrials, materials, consumer discretionary, financials and small-cap stocks have joined megacap technology names in powering the rally. As a result, the number of S&P 500 SPX, +0.85% stocks trading above their 50-day moving average, a closely watched momentum gauge frequently used by technical analysts, has risen to 83.2% as of Wednesday’s close. That’s up from a low of 16.4% on March 10, according to StockCharts data. “There was a long period of people saying that this was a very fragile market. But that has stopped,” Kempenaer said during a phone interview with MarketWatch. “The fact that this is happening while the Fed is still raising rates makes it even more impressive,” he added. Here are a few other notable factoids that illustrate just how far the market has come from the doldrums of last fall. The S&P 500 has risen 26% off its closing low on October 4 last year of 3,577.03, according to FactSet data. The index closed at 4,357.86 on March 16, 2022, the day the Fed announced its first interest rate hike of the cycle. Stocks are now trading more than 3% above that level. On Jan. 4, 2022 year the S&P 500 hit an all-time intraday high of 4,818.62. The index is now within 7.2% of this level. To be sure, the technical setup isn’t the only factor working in the market’s favor. The fundamental outlook for the U.S. economy has improved following the release of Wednesday’s CPI report, which showed inflation in June slowed to its weakest level since August 2021, taking economists by surprise. Consumer prices increased by 0.2% in June, less than the 0.3% increase that economists polled by The Wall Street Journal had expected. Neil Dutta, head of economic at Renaissance Macro, summed up the reaction by declaring that the U.S. economy has entered “goldilocks” territory. The term was closely associated with the decade-long bull run that followed the financial crisis in 2008. It signifies an economic equilibrium where growth is robust and inflation subdued. “Inflation is poised to moderate over the summer as the Fed dials back its tightening campaign in response. This is a positive combination for risk assets,” Dutta said in research shared with MarketWatch on Thursday. Of course, it’s possible something could go wrong to derail the rally. Stocks have risen rapidly since the S&P 500 finally saw a sustainable break above 4,200 back in May. Last week’s pullback, the second losing week for the S&P 500 in three, gave investors a taste of what a pullback might look like when ADP private payrolls data showed nearly half a million jobs were created in June. The data sent Treasury yields surging, which sparked a selloff in U.S. stocks. The following day, the June nonfarm payrolls report from the Department of Labor showed that number was way off. But hotter than expected wage growth of 0.4% helped cement expectations that the Fed would need to push rates higher, and keep them elevated for longer, to tame inflation. That notion has passed seemingly as quickly as it arrived. Still, de Kempenaer believes another leg higher in long-duration Treasury yields, like the 10-year note TMUBMUSD10Y, 3.768% and 30-year bond TMUBMUSD30Y, 3.903% , could create problems for stocks. “If you look at the ratio of stocks vs. bonds, stocks are just ripping. But the stock market needs the bond market to be able to continue its rally,” he said.