Wall Street's forecast for the US stock market in 2025 has reached a new high.
On Tuesday, Christopher Harvey, a stock strategist at Wells Fargo, and his team released the target point for the S&P 500 index by the end of 2025: 7007 points.
This is the highest target price given by mainstream Wall Street investment banks, which means that the S&P 500 index is expected to rise by about 16% by the end of next year.
On Tuesday, the three major indexes of the US stock market fluctuated, with the S&P 500 index and Nasdaq index hitting new closing highs. Technology stocks continued their recent gains, and investors are waiting for more employment data. The Dow Jones Industrial Average closed slightly lower. As of the close, the S&P 500 index rose 0.05% to 6049.88 points.
The target price given by Wells Fargo is 7 points higher than the predictions of Deutsche Bank and research firm Yardeni Research, both of which predict that the S&P 500 index will close at 7000 points by the end of 2025, the highest prediction previously made by Wall Street.
Overall, we expect the Trump administration to create an increasingly favorable macro environment for the stock market, while the Federal Reserve will slowly cut interest rates, "Harvey wrote in his 2025 stock market outlook.
In short, this is a background of the stock market continuing to rise
Harvey added that the stock market will rise in an environment where corporate profit margins continue to expand, the US economy grows faster than the current general forecast of 2.1%, and "merger and acquisition activity rebounds".
Harvey believes that the upward correction of GDP and regulatory environment will catalyze cyclical opportunities. This is similar to Bank of America's outlook for 2025, which also predicts that US economic growth will drive cyclical sector gains.
Harvey predicts that weighted indices such as the S&P 500 will perform well in 2025, which is different from market capitalization weighted indices and will not be overly affected by the trend of large tech stocks.
In other words, Harvey is the latest Wall Street analyst to predict that the scope of the US stock market rebound will expand from the "tech seven giants" to the other 493 constituent stocks in the S&P 500 index.
Harvey also wrote in the report that considering the optimistic market sentiment, high stock market valuations, and stable economic growth, he initially "tended to invest in the opposite direction," but "the data does not support weak or negative growth in the S&P 500 index.
2025 is likely to be a year of transition from stability to strength, "wrote Harvey.
As 2024 approaches its end, Wall Street analysts are giving their stock market outlook for 2025. The target price they shouted out was getting higher and higher one by one.
Goldman Sachs and Morgan Stanley both predict that by the end of 2025, the S&P 500 index may touch 6500 points, citing sustained growth in the US economy, strong corporate profits, and the Federal Reserve's path of interest rate cuts. Bank of America predicts that by the end of 2025, the S&P 500 index is expected to reach 6666 points.