Here's where Wall Street sees stocks heading after the best 2-year stretch since '97-'98
Published On Dec 31, 2024, 4:15 PM
Wall Street anticipates a slowdown in stock gains after a remarkable two-year rise in the S&P 500, which surged over 20% each year. Experts project that while earnings will remain strong and the US economy resilient, 2025 may experience increased volatility due to uncertainties around Federal Reserve rate cuts and potential political changes from a new Trump administration. Analysts expect a normalized return for various sectors rather than focusing heavily on tech stocks. Predictions for the S&P 500's year-end target range from 6,600 to 7,100, with an average growth of around 9.8% to 12% expected.
Stock Forecasts
XLF
Positive
Given the expectation of continued earnings growth alongside economic resilience, financial and consumer discretionary sectors are likely to outperform. Value stocks are suggested to gain more favor in 2025 due to a crowded growth stock trade.
XLY
Positive
The projected growth in GDP supports optimism, and markets are seen transitioning from high-flying tech stocks to diversified sector investments, strengthening mid-cap and value stocks.
SPY
Negative
Awareness of potential market volatility due to inflation fears and changes in economic policy may prompt short-term pullbacks in major indices, affecting sentiment and leading to caution in investment strategies.
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