Bull Market Continues into 2025?
2024 was a record-breaking year for the S&P, NASDAQ, and Dow Jones listed stocks.
With the election of the Pro-American business Donald Trump, the markets have much to celebrate. Reduced taxes, regulations, and government wasted spending, on the back of lower interest rates will spur the economy in 2025. There are still many who don’t believe it will happen, but President Trump is already making serious waves internationally.
Earnings will grow as consumer spending increases, and business costs, particularly for the long-punished small business sector will decrease.
President Trump will fashion a new trade agreement with Canada and Mexico, which will prevent back-door importation of China goods. And strong tariffs will ensure US exporters can reach the globe, and protect predatory nations from getting unfair advantages within US markets. President Trump is righting a lot of wrongs.
Ed Yadenia of Yardeni Research believes we are in the roaring twenties with the S&P reaching 7000 by year end and 10,000 by 2030. His long-range forecast shows the US is positioning for a golden era of prosperity with consistent growth and stock earnings. In this chart of market analyst forecasts from Yahoo Finance, market analysts are still missing forecasting on the low side, seemingly resisting the Trump trade influence happening.

A Big List of Positive Factors Fueling Optimism
The FED rate is the number one factor, however, a win by President Trump in the Nov 8 election is a big pro-market, anti-regulation, pro-carbon energy, pro-economy and pro US statement. Overall, he intends to make the US economically strong and enforce investment in American companies. See the full list of bull market factors, and why this year’s Santa Claus rally could be record breaking.
Tom Lee of Fundstrat is even more optimistic about 2025 for the S&P. He’s increased his forecast of corporate earnings next year to $2.75 from $2.60/share. In an interview on CNBC, he said he believe the S&P will grow 20% each year to 2030.
With industrial repatriation back from China, AI chip manufacturing, massive oil production, and perhaps lower taxes via Trump, it’s hard not to be giddy about the 2025 outlook for the economy and for equities. And for US equities, there is $6 Trillion in money markets still waiting to move over. Early 2025 seems the most likely moment as the forward progress of the economy becomes certain in investors minds.
Let’s explore further in this post why the 2025 stock market forecast is so positive.
Consider that the key stocks in the S&P and NASDAQ such as Apple, Nvidia, etc. will gain significantly as the economy heats up, and they’ll drag the markets up further too. The Mag7 are predicted to lag in growth, while the other 493 S&P stocks are expected to surge. The market rotation is expected to happen for real this time in 2025/2026. Keep your eye on the Russell 2000 and 3000 stocks as this is where many of your best stocks to buy can be found.
Goldman Sachs expected moderate GDP growth however they may be upgrading this given they’ve upgraded the 2025 forecast for stocks.
US GDP Forecast 2025 through 2034. Screenshot courtesy of Goldman Sachs.
Lower Rates, Lower Taxes, Less Regulation, and the end of Globalism
Lower rates enable lending and cause the US dollar to fall, which makes US exports much cheaper. With protectionist trade barriers, companies are forced to purchase supplies in the US. With lower mortgage rates, the housing market should heat up considerably. Lower credit card rates further free up consumer’s budgets. Cars, appliances, furniture would all fall in price.
Lower government debt is a big positive too, yet the real matter is money flowing back into the US and back into the private sector. Most Americans don’t realize that trillions were pushed into government where it created little benefit (illegal immigrant support), and actually produce damaging inflation.
As money market rates fall, investors who own $6 Trillion in funds will want to move them into the equity markets which helps businesses move forward. Lower interest rates and more small business investment means job growth will be strong.
However, economists also believe the economy will only return back to its state in 2019 at about 1.8% GDP growth. That’s an unlikely scenario and more of them will abandon their pessimistic views as President Trump takes office and begin enacting executive orders and passing Senate and House bills.
Global Economies Should Provide Some Tailwinds
The OECD is expecting continued growth in the global economy as all countries come out of the high interest rate era.
There are those who believe China will see its economy falter as the US adopts an xChina trade policy. While China production might fall, the country will still overproduce goods and easily supply the US, and at reduced prices. That helps to keep US prices down, even with tariffs. And tariffs protect US companies, balance trade deficits, and provide significant tax revenues. President Trump has mentioned eliminating income tax at some point for many Americans, and that would be very positive for job growth and consumer spending.
The AI-based economy is only growing and is expected to underpin the economic engine of the USA. That conversation is beyond the scope of this post, but Goldman Sachs Research forecasts AI will start having a measurable impact on US GDP in 2027.
Lower interest rates will give the US economy and stock market a big boost. And with these pro-business actions being taken by President Trump, it’s hard to find negatives that could erode this positive stock market outlook.