S&P 500 projected to rise 9% by 2025

S&P Rise
S&P Rise

The S&P 500 is expected to end 2025 at 6,630. This represents about a 9.6% advance from where the S&P 500 closed on Thursday. On a median basis, the S&P 500 is expected to end 2025 at 6,600.

This also points to a 9% gain. The current 2025 targets from top strategists are:

Maximum target: 7,100 — John Stoltzfus, Oppenheimer
Minimum target: 6,400 — Jonathan Golub, UBS
Average target: 6,630
Median Target: 6,600

Investors fully expect the bull market to continue in 2025. They are mindful that the rally will hardly be as rewarding in its third year after the significant gains experienced in the preceding two years.

The S&P 500 surged 27% in 2024 after climbing 24% in 2023. “There are strong tailwinds supportive of stocks in 2025,” Tom Lee, head of research at Fundstrat Global Advisors, wrote in his outlook. Lee expects the S&P 500 will close out 2025 at 6,600 after reaching 7,000 halfway through.

He noted that stocks historically perform worse in the second half of the third year of a bull market. Still, no strategist surveyed expects the market will end next year lower than it is now. The highest target on the 2025 survey is from Oppenheimer’s John Stoltzfus, whose 7,100 objective implies a 17% move higher from Thursday’s close.

The lowest target is from UBS’s Jonathan Golub, who forecasts the S&P 500 will rise to 6,400, about a 5% gain. There is a lot to be positive about in today’s market, according to Wall Street.

S&P 500 growth outlook for 2025

A strong macroeconomic picture, reflected in a broadening out of the market’s winners, underpins a robust earnings growth outlook for next year. An easing interest rate outlook and President-elect Donald Trump’s pro-business policies are viewed as additional positives for the market, especially for cyclical assets most closely tied to economic fortunes. Binky Chadha, chief U.S. equity and global strategist at Deutsche Bank Securities, said his expectation of roughly 11% earnings growth in 2025 supports a year-end S&P 500 forecast of 7,000.

He also expects strong corporate activity, including a rise in buybacks and spending on mergers and acquisitions, to bolster the stock market. However, some glaring challenges remain. Tariffs are top of mind as a primary risk for many strategists, who fear they will prove inflationary.

Trump has threatened tariffs of 60% or more on Chinese goods and vowed to impose 25% tariffs on everything imported from Mexico and Canada. Despite this, some strategists are not particularly worried about the tariffs, expecting Trump’s deregulatory efforts to offset any harm. “Our working view is that tariffs and the trade war won’t disrupt the business cycle,” Deutsche Bank’s Chadha said.

Another concern is the market’s current valuation, which has some strategists seeking returns outside the S&P 500. Savita Subramanian, Bank of America Securities head of U.S. equity and strategy, prefers the S&P Equal Weight Index to the traditional S&P 500, which is ranked by each company’s market capitalization. She noted that the market cap index is expected to deliver returns in the “low single digits” over the next decade, while gains in the equal-weight index could be around 5% to 6% per year.

Elsewhere, Goldman Sachs’s David Kostin expects the S&P 500 to end next year at 6,500, as does Morgan Stanley’s Mike Wilson. BMO Capital’s Brian Belski sees a rise to 6,700, while UBS forecasts 6,400 by this time next year.

Kayla Lear

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