Nolte said that corporate profits will grow only if US consumers -- who represent 70 percent of economic activity -- keep spending more. But he sees this as unlikely, especially with interest rates well above last year's lows and the housing market cooling, curbing the ability to take out home equity loans.
When the dust settles, analysts said the only major catalyst for the market may be the Federal Reserve, if it ends its recent cycle of interest-rate hikes.
"Historically, when the Fed is about done, the markets start to rally. But historically when the Fed stops, we have valuations much lower than they are today," Nolte said.
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