Wall Street is brimming with optimism as investors predict continued gains for the US stock market in 2025, building on two years of robust performance that have far exceeded expectations, according to Reuters.
The benchmark S&P 500 (^GSPC) surged 23.31% in 2024, its second consecutive year of gains surpassing 20%. Despite a recent dip in momentum, the index has been buoyed by the resilience of the US economy, a solid earnings backdrop, and excitement surrounding technological advancements, particularly in artificial intelligence.
Over the past two years, the S&P 500 has soared by 53.19%, marking its biggest two-year percentage jump since 1998 and cementing its position as a major global financial engine. Analysts attribute much of this growth to a combination of factors: moderating interest rates, the ongoing impact of pro-business policies, and the dominance of megacap technology stocks, which have driven much of the broader market’s rise.
Looking ahead, investors are betting that these tailwinds will persist into 2025, with expectations that corporate profits will remain solid, inflation will remain manageable, and incoming pro-growth measures from President Donald Trump will help sustain market momentum.
As the new year unfolds, attention is now turning to how the economy will adjust to potential shifts in fiscal policy under Trump’s incoming administration, with investors hoping that further regulatory and tax reforms will encourage further investment in US. companies.
