The last months of 2024 have been quite hectic for the main Wall Street indices. S&P 500, NASDAQ 100 y DOW JONES Ind Average have shown a great upward trend after Donald Trump’s victory in the presidential elections against a pro-market policy. Although with some tariff drafts which could lead to headaches. Given this, analysts have made their predictions.
One of the main catalysts for the indices is the inflation according to Barry Bannister, chief investment strategist at Stifel on Yahoo Finance. It has increased to 2.7% year-on-year in November.
Higher interest rates could hamper current gains S&P 500which has reached a historical maximum around 6,000 pointslevel at Thursday’s close. For Bannister the index will close next year in the 5,000 points.
“The environment does not appear conducive to continued equity mania, and we prefer more defensive sectors,” Bannister wrote in a note to clients on Thursday. He added that slower economic growth would benefit the manufacturing sectors. “defensive value”, including the healthcare, utilities and commodities sectors.
Bannister believes the FED will cut interest rates by 25 basis points at each of its next two meetings before implementing a longer pause due to persistent inflation and “zero fiscal visibility.”
Recent data has shown that inflation is not falling rapidly to the FED’s 2% target. This has led economists to believe that probably will cut interest rates less than expected initially in 2025. Which will impact market enthusiasm.
It should be noted that Stifel is the only firm that expects a correction, while the rest remain optimistic with a maximum in 7,100 points.
By 2025, the S&P 500 will likely continue to benefit from diversification of its sectors. The index could grow in line with global economic growth, although analysts warn there could be periods of volatility due to changes in fiscal and monetary policy, and the possible impact of a slowdown in the global economy.
Regarding the NASDAQ 100the new highs reached have been partly thanks to the potential of big tech like Nvidia. As you know, this index is known for its close relationship with technology and the boom in artificial intelligence added to the enthusiasm of the last presidential elections has taken it to the 21,600 points at Thursday’s close.
Another factor that has drawn the attention of analysts to the index is the possible incorporation of Microstrategy as a new component. As you know, the firm has a significant investment in Bitcoin. There are other firms in the race such as Palantir Tchnl-A y Coinbase Glb Rg-A.
By 2025, many analysts believe the Nasdaq could remain driven by the technology sectorwhich has enormous growth potential in areas such as artificial intelligence, quantum computing, biotechnology and renewable energy. However, the valuations of technology companies could generate uncertaintysince if the FED maintains high interest rates, as we explained with respect to the previous one, they could affect growth technology stocks.
The next resistance that analysts establish is found in the 21,800 pointstwo hundred from Thursday’s close.
The losses incurred by the DOW JONES Ind Average In recent days they have worried analysts by correcting even the 43,914 pointsafter the maximum of 45,000 points. Nitin Hajare, trader professionalhas shown his concern about this in X. “The Dow Jones has lost five consecutive days. The weekly chart is also showing bearish signs and it will be crucial to see if it can close above 44,750 to avoid a possible bearish attack.
“It will be interesting to see how it goes next week.”
As the global economy is expected to fully recover, the Dow Jones is projected to see a constant growth towards 2025especially if large industrial companies continue to innovate and take advantage of opportunities in sectors such as renewable energy, infrastructure and health.
Looking ahead to the coming weeks, analysts at Financial District have pointed out in from Donald Trump’s rally.