This is a "Sleeping Beauty" market that will only get awakened by an improvement in average hourly earnings, retail sales and corporate profits, independent investment consultant David Darst said Friday.
"If we don't get those three things the market can't go up," the former chief investment strategist at Morgan Stanley Wealth Management said in an interview with CNBC's "Closing Bell."
"I'm amazed the market is holding in as well as it is."
Weak data weighed on the markets Friday, with stocks closing lower.
Chicago PMI unexpectedly fell in May and consumer sentiment for the month was the lowest since November, although it still beat expectations. A revision of first-quarter gross domestic product showed a decline of 0.7 percent.
Darst believes the market will stay in this trading range until there is a strengthening in the labor and housing markets.
"The 80 percent of the Americans who do the real work in the economy ... basically have to be in a more animalistic spending mood," he explained. "All the gains have flowed to the people who own assets."
For those 80 percent, the biggest asset is their house.
"If that goes up, that'll maybe put them in a better spending mood. That, and a little bit of tightness in the labor market."
Darst advises investors to keep an eye on bank stocks, which he said have "acted so well" and may be indicating a strengthening in the housing market.