During a turbulent quarter that saw geopolitical tensions rise and natural disasters wreak havoc in the United States and the Caribbean, the major averages still managed to eke out gains and end the third quarter higher.
And according to the Street's top strategists, the run may be far from over.
Eighty-seven percent of respondents in CNBC's exclusive "Halftime Report Stock Survey" said they believe the S&P will finish the fourth quarter higher, with seventy-nine percent expecting a jump of at least five percent.
As of Thursday's close, the index was trading at 2,510, so a gain of five percent would put it at 2,635 by year-end — a record-setting level.
In this current market of record-setting highs — the S&P has hit 39 record intraday highs this year, the Dow 41 — there's been much talk about whether stocks are over-valued. But according to the survey strategists think these fears might be overblown. Sixty-four percent of respondents said they believe equities are correctly valued.
The financials sector is the strategists' top pick for finding value in the fourth quarter. The bank stocks rallied following the election on the hopes of regulatory reform and higher rates, but gridlock in Washington has caused the sector's gains to lag those of Tech, Health Care, Materials and Industrials year-to-date.
The strategists are also watching tech. Despite the sector's run — higher it's the best-performing S&P sector this year, up more than twenty-five percent — more than half of strategists believe those gains will continue in Q4.
Interestingly, fifty percent of respondents said energy is a place to find value in the fourth quarter. The sector has weighed on the S&P this year — it's fallen nine percent year-to-date as crude struggles to stay above the key $50-level.
Heading into the end of the year strategists are split on whether investors should stay in the U.S. or look abroad to find the biggest returns.
Thirty-six percent said emerging markets look the most attractive for the fourth quarter, while another thirty-six percent said to stay in the United States.
So far this year emerging markets have been the winning trade. The EEM, which tracks developing economies has returned more than 25 percent this year, topping the S&P's twelve percent gain. But with the Federal Reserve indicating that rates will rise, strategists believe some of the money that has fled overseas will be put back into the US economy.
Just over twenty percent of respondents said they're also watching Europe for the fourth quarter.
Tax reform has been a key initiative for the Trump administration, and on Wednesday the White House announced its ambitious plan. Part of the proposal includes cutting the corporate tax rate from 35 percent to 20 percent, which could be a major boost for U.S.-based companies.
However, a majority of the strategists are not optimistic that the tax reform package will be enacted before the end of the year, with seventy-one percent arguing the legislation won't pass.