The U.S. stock market is set to continue its bull run in 2025, according to leading financial institutions. Early projections show optimism for the S&P 500, with gains fueled by economic resilience, corporate earnings growth, and investor confidence in a favourable political environment.

  • Goldman Sachs Prediction:
    • Targets S&P 500 at 6,500 by year-end 2025 (10% growth).
    • Driven by 11% earnings per share (EPS) growth and sustained economic expansion.
    • Notes reduced dominance of the “Magnificent Seven” stocks, including Nvidia and Apple.
  • Morgan Stanley Outlook:
    • Also projects 6,500 by end of 2025, with a bullish EPS growth forecast of 13%.
    • Warns of risks tied to election-related uncertainties.
    • Sets a best-case target of 7,400 (+26%) and worst-case of 4,600 (-28%).
  • UBS Forecast:
    • Predicts S&P 500 will hit 6,600, a 12% increase.
    • Suggests election results accelerated optimism for economic and market growth.
  • BMO Capital Markets:
    • Foresees a 6,700 target (+14%).
    • Emphasizes stronger-than-expected earnings growth and the Federal Reserve’s continued rate cuts.
  • Evercore ISI:
    • Mid-2025 target of 6,600, citing the bull market as still early in its cycle.
    • Notes a current “digestion phase” after post-election rally gains.
  • Yardeni Research:
    • Predicts the S&P will hit 7,000 (+19%) by late 2025.
    • Anticipates longer-term growth, projecting 10,000 by 2029, a 16% annualized return.

Background and Context:

  • Current Performance:
    • S&P 500 is up 23% year-to-date in 2024, following a similar 23% gain in 2023.
    • On track for the best two-year performance since the late 1990s.
  • Tech-Driven Growth:
    • Gains heavily influenced by major tech stocks like Amazon, Meta, Nvidia, and Tesla, all up 150%+ since late 2022.
  • Concentration Concerns:
    • Experts note the market’s high concentration in tech stocks but predict eventual broadening to other sectors.

The S&P 500 appears poised for another year of gains, backed by earnings growth, easing monetary policy, and political optimism. However, with risks tied to market concentration and geopolitical factors, investors should balance bullish forecasts with caution.