S&P 500 expected to rise over 8% by 2025 due to rate cuts, Trump policies

From Investing.com: 2024-11-26 08:27:11

Equity strategists predict the S&P 500 to rise over 8% by 2025, fueled by anticipated U.S. interest rate cuts and deregulation under Trump. Financials are a top sector pick, with expected earnings growth of 14.2%. However, concerns about inflation and potential stock market corrections persist.

Following Trump’s victory, stocks surged to record highs in 2024, with tech giants leading the way. The S&P 500 is expected to close 2025 at 6,500 points, an 8.5% increase from its current level. Market participants are optimistic about Trump’s tax cuts and deregulation spurring further economic growth and market gains.

The “Magnificent 7” stocks, including Nvidia and Microsoft, are likely to continue their upward trend in 2025, albeit at a slower pace. Financial sector stocks have surged 35% year to date, with technology stocks not far behind at a 33% increase. Bank stocks have particularly benefited from the potential for increased merger activity.

Investor worries include a possible stock market correction early next year, with some predicting a 10% downturn. The poll predicts the Dow Jones Industrial Average to end next year at 46,600. Despite concerns about inflation and Fed rate-cutting ability, market valuation remains strong based on projected earnings and economic growth.



Read more at Investing.com: S&P 500 projected to climb over 8% by end-2025 on rate cuts, Trump policies: Reuters poll By Investing.com