Los wall street indices have experienced gains in the last two years. Analysts maintain the double-digit growth outlook for them in 2025. Although their forecasts are shown more moderate than last year in the midst of a new administration in the White House led by Donald Trump.
Most analysts expect double-digit growth for the S&P 500 of 14.08%, according to Factset.
U.S. indices saw big gains last year thanks to strong economic growth, slowing inflation, a series of Federal Reserve rate cuts and enthusiasm over President-elect Donald Trump’s election victory.
Big Tech and artificial intelligence were the protagonists in 2024 and are expected to continue being the protagonists in 2025.
However, disadvantages have been found for the next twelve months such as Trump’s tariff policy, the resurgence of inflation and geopolitical tensions.
Moderate forecast
The S&P 500 closed the years 2023 and 2024 with an annual gain of 24% and 23% respectively. Nevertheless, They do not expect another year with similar increases. The forecasts of UBS Group N (6,400 points), Goldman Sachs Gr (6,500 points) and Bank of America (6,666 points) for the S&P 500 in 2025 range between growth of around 10% al 14%.
Christopher Harvey, head of equity strategy at Wells Fargois one of the most optimistic and expects the S&P 500 to reach 7,007 points by the end of 2025. A gain of about 19%.
Other analysts estimate the following objectives:
- Oppenheimer 7.100 puntos
- Yardeni Research 7,000 points
- Evercore ISI 6.800 puntos
- HSBC 6,700 points
- Fund start 6,600 puntos
- Morgan Stanley 6,500 points
- Stifel 5,500 points
Analysts expect gains to continue as they anticipate strong economic growth, corporate profits and a business-friendly administration under Trump. Without forgetting the boost provided by profits related to artificial intelligence.
A bearish look
But not everything is rosy among analysts, as volatile politics during the Trump presidency, a brief pause in Federal Reserve policy and a market that has encountered very little resistance could pose problems for stocks in 2025.
Following the latest Federal Reserve meeting, the interest rate cut is expected to be paused during 2025.
“The most significant wild card on the table for 2025 will be the potential implementation of tariffs,” said David Sekera, chief US market strategist at Morningstar, according to CNN.
“A prolonged sell-off could undermine U.S. economic growth,” Mark Zandi, chief economist at Moody’s Analytics, said in a post on X, saying he believes the economy is “highly vulnerable to a stock market sell-off.” He described how the growth of the stock market has been driven by wealthy households choosing to spend more and save less.
“If the stock market falters, which I have argued is a serious risk, these wealthy households would surely respond by saving much more and spending less,” Zandi added.
Another risk factor is concentration of power by Big Techsince five of them represent approximatelynte 25% of the S&P 500. What can bring a systemic risk. The expansion of the valuations of the Magnificent Seven beyond their fair value calls into question their sustainability, according to analysts at Goldman Sachs. Therefore, They recommend maintaining exposure to equities. But with a more defensive approach for 2025.
New results season
Amidst the estimates for the main Wall Street index, this month of January is full of results. Which will update what the last quarter has left us and the perspectives that could be left for the coming months. Taking into account above all the doubts about the valuation of large technology companies and how the market will react after their results.
Remember what happened to NVIDIA after its presentation at CES 2024 and the expectations of analysts. Taking into account that it was not a presentation of results.
The big Wall Street banks like JPMorgan Chase, Citigroup y Goldman Sachs will begin making their results presentations next January 15. While the big technology companies will do so in the second fortnight, being Netflix the first the January 21followed by Microsoft, Tesla y Meta (Facebook) January 29. While Apple will do it on January 30.