US stock market and Wall Street main index S&P 500 is set for back-to-back years of gains over 20 per cent, as per Reuters report.
Investors are expecting more gains for the US stock market in 2025 after two straight standout years, fueled by a solid economy supporting corporate profits, moderating interest rates and pro-growth policies from incoming president Donald Trump, Reuters reported.
Investors are more confident about the economy than this time a year ago, with consumers and businesses having absorbed higher interest rates and the Federal Reserve now lowering them – albeit by not as much as hoped. Corporate profits are also expected to be strong, with S&P 500 earnings projected to rise 14 per cent in 2025, according to LSEG IBES.
The benchmark S&P 500 is up over 23 per cent year-to-date, even with a recent speed bump, and is on pace for its second straight year of gains exceeding 20 per cent, lifted by megacap tech stocks and excitement over the business potential of artificial intelligence, Reuters report.
On the other side of the ledger, inflation remains stubborn, and Wall Street is wary of a rebound that could lead the Fed to change course on its easing cycle. Indeed, stocks pulled back sharply on Wednesday after the central bank projected fewer rate cuts next year as it braced for firmer inflation.
Such prospects could become more likely if Trump implements tariffs on the US imports that lead to higher consumer prices. Stock valuations, meanwhile, are around their steepest levels in more than three years, leaving greater potential for turbulence.
Wall Street firms are mostly projecting gains for the market next year, with S&P 500 year-end targets ranging from 6,000 to 7,000. The index was last hovering around 5,900.
The current bull market for the S&P 500 that began in October 2022 is less than half as long as the average length of the 10 prior ones, according to Keith Lerner, co-chief investment officer at Truist Advisory Services. The S&P 500’s roughly 64 per cent gain during this latest run trails the 108 per cent median gain and 184 per cent average rise of the prior bull markets, according to Lerner.
FAQs
Q1. What is main index of US stock market and Wall Street?
A1. US stock market and Wall Street main index is S&P 500.
Q2. What is outlook for S&P 500?
A2. Wall Street firms are mostly projecting gains for the market next year, with S&P 500 year-end targets ranging from 6,000 to 7,000. The index was last hovering around 5,900.
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