Top Wall Street bull sees possibility of feverish stock rally fading in second half of 2025

Published On Dec 12, 2024, 4:00 AM

Tom Lee, head of research at Fundstrat, predicts that the S&P 500 could gain another 16% in the first half of 2025 due to favorable conditions like a potential Fed rate-cutting cycle and supportive White House policies. However, he forecasts a slowdown or pullback in the market in the second half, ending the year around 6,600 — indicating a 9% increase from current levels. Lee's analysis highlights a historical pattern of weaker performance following consecutive years of significant gains in the market. He also sees opportunities in small-cap stocks due to potential deregulation and M&A activity.

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Positive

Possible gains in small-cap stocks and S&P 500 in the first half of 2025 with anticipated supportive conditions. However, expect a market pullback in the second half due to historical trends.

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