Wall Street Strategists Predict Slower Gains for S&P 500 in 2025
Title: Wall Street Strategists Predict Slower Pace of Gains for S&P 500 in 2025
After two consecutive years of impressive gains for the S&P 500, Wall Street strategists are forecasting a slower pace of growth for the benchmark index in 2025. Despite strong earnings expectations and resilient US economic growth, uncertainties surrounding Federal Reserve rate cuts and the new Donald Trump administration are expected to bring more volatility to the stock market.
BMO Capital Markets chief investment strategist Brian Belski anticipates a more normalized return environment in 2025, with a year-end target of 6,700 for the S&P 500. Other strategists have varying predictions, with the median year-end target sitting at 6,600, representing a 12% increase from the current level.
Goldman Sachs chief US equity strategist David Kostin believes that the market could continue to surge higher even without the massive outperformance of the “Magnificent Seven” tech stocks. However, the margin of outperformance for these tech stocks is projected to narrow in 2025, potentially impacting overall market returns.
RBC Capital Markets’ Lori Calvasina highlighted the potential for a shift towards value stocks as growth stocks become a crowded trade. The outlook for 2025 is heavily dependent on US economic growth exceeding expectations, with Bank of America projecting a growth rate of 2.4% for the year.
Despite bullish prospects, there are key risks to strategists’ calls, including the potential for a resurgence in inflation and uncertainties surrounding the new Trump administration’s policies. These factors could lead to more volatility in the stock market in 2025.
Overall, Wall Street is cautiously optimistic about the market’s performance in 2025, with a focus on economic growth, inflation, and policy developments as key drivers of market movements.
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