Stocks will end 2025 lower due to sticky inflation, economic slowdown, Stifel predicts

Published On Dec 15, 2024, 8:01 AM

Stifel's chief investment strategist, Barry Bannister, predicts that the stock market will end 2025 lower due to persistent inflation and a potential economic slowdown. He suggests that the S&P 500 index may drop to the mid 5,000s from its current level of around 6,070. Bannister's views resonate with concerns that high inflation will hinder the Federal Reserve's ability to cut interest rates, which could pressure market growth. In contrast, other strategists expect a rally before a dip but primarily advocate for investment in defensive sectors like healthcare, utilities, and consumer staples as conditions worsen.

Stock Forecasts

With the anticipated economic slowdown and sticky inflation, defensive sectors may provide stability against broader market volatility. Stocks in healthcare, utilities, and consumer staples are expected to outperform, given their resilience in downturns.

The overall bearish outlook for stocks may present difficulties for broader indices like the S&P 500. As economic conditions weaken, growth-oriented sectors may face significant headwinds, likely leading to declines in their stock values.

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