After a stellar start to 2023, many big bank analysts are skeptical that this rally can continue and urge investors to prepare for another leg lower. All the major averages posted a blowout start to the year, with the S & P 500 rallying more than 6% for its best January since 2019 following the worst year for stocks since 2008 . The Nasdaq Composite posted even larger gains, surging 10.7% for its best monthly performance since July. This big step higher raised hopes among many market participants that stocks are finally due for a rebound after a painful 2022 marred by rates hikes, high inflation and recession fears. But a stronger-than-expected jobs report, showing nonfarm payrolls increased by 517,000 in January, and earnings season underway paint a different picture, casting doubt on Wall Street over whether 2023’s rally has more room to run. “We believe investors should fade the YTD rally as recession risks are merely postponed rather than diminished,” wrote JPMorgan’s Marko Kolanovic in a January note to clients. The firm’s chief global markets strategist told CNBC’s ” Fast Money ” last month that he’s ” outright negative” on the market and bracing for a 10% correction, or more, in the first half as fundamentals worsen. According to Morgan Stanley’s Mike Wilson, last week’s economic events offered no “conclusive evidence” to imply that a bull market kicked off in October, he wrote in a Monday note. Wilson also raised concerns over the fact that the Federal Reserve remains hawkish even though an earnings recession looms. Kolanovic and Wilson aren’t alone in this view. .SPX YTD mountain The S & P 500 is up more than 7% so far this year Savita Subramanian, Bank of America’s head of U.S. equity and quantitative strategy, said in a recent note that investors should prepare for a slew of “cross currents” to complicate this year. Meanwhile, Barclays’ Venu Krishna wrote in a Monday note that equities have “jumped the gun.” “Risk assets, especially equities, are mispricing inflation and growth risks,” he said. Several factors, including falling recession risks and a correction in the CBOE Volatility Index and other spreads, also support a long-due fade in the market rally, wrote Credit Suisse’s Patrick Palfrey in a January note. “Unfortunately, we believe the impact from these positive catalysts have largely played out, limiting both the market’s upside and the continuation of January’s leadership,” he said. As these concerns mount, some analysts and strategists expect the S & P 500 to remain rangebound this year despite the recent takeoff in shares. Given this backdrop, Goldman Sachs’ David Kostin raised the bank’s 3-month price target on the benchmark index to 4,000 from 3,600, but retained the Wall Street firm’s year-end 4,000 target. According to Kostin, a soft landing is already priced into equities, and even if the U.S. avoids a recession, growth and further upside appears minimal. “Valuations are elevated vs. history and will be constrained by an eventual rise in interest rates,” he wrote. UBS Global Wealth Management’s Solita Marcelli agreed with Kostin’s 2023 4,000 forecast, which would represent roughly 3% downside from Friday’s close, saying in a Monday note that the risk-reward for equities looks unattractive. “We continue to recommend that equity investors position defensively and be prepared for additional volatility ahead,” she said. — CNBC’s Michael Bloom contributed reporting