3 Month Stock Market Outlook

Today, March 31st, 2025, investors are waiting with trepidation as in only 2 days, the reciprocal tariffs on US imports kick in.  The stock market is going to be exciting this week. Some may win big and others could lose badly. This week, experts believe will be volatile and slightly negative.

On Friday, equities markets lost significant value as this chart shows. Investor sentiment has soured. The downturn continue this morning (NASDAQ -1.7%).  It’s difficult to see investors getting over the recent negativity that quickly only due to a likely Trump comment market rebound. Trump is seeing significant foreign direct investment announcements and US manufacturers are taking his statements seriously.

Later this week, we might see the US’ trade partners capitulate as a group and agree to remove all tariffs and trade barriers against the US. And it could be the day they up their counter-tariffs, a move the President says he will absolutely punish. They’re all testing their strongly stated convictions starting now.

Experts say investors are listening too much to the media with their hyped reports about economic damage, the end of democracy, and a shrinking government, and that the tariffs are an exceptionally good thing only for US companies. And the much-vaunted recession call may be overdone as one expert noted that imports only comprise 14% of national GDP.  The US isn’t as exposed to trade as everyone thinks.  Bolstering US companies and protecting them can result in sizable wins in sales and corporate revenues. There’s a big upside for US companies who don’t import and sell to US consumers. You may want to identify those companies.

The thought with the doomsday callers is that the US production renaissance would fall flat without cheap imported commodities and parts. We’ll find out in the next 3 to 6 months whether that is a real issue, or just fear tactics from the Democrats.

Trump announced a full 25% tariff on all imported automobiles, to sweeten his themed message, a move that has US autoworkers beside themselves with joy. It looks like a great time for the US automakers who are developing more comprehensive supply chains locally rather than the current complex international process. Whether that cuts or raises the cost of a vehicle remains to be seen.

What Will Happen in this Summer’s Transition Period?

This outlook is for the next 3 months, April, May and June.  This is the heart of the economic transition period, thus Trump’s changes will disrupt, raise immediate costs, create layoffs, lower consumer spending, raise inflation temporarily, confuse and stifle Capex spending, and likely cause a big downward correction.

That correction scenario has to stand as the most likely, however, President Trump could make some statements and retract a few tariffs which would then be overblown by the media and analysts resulting a rally. It’s all crazy depending on the momentary whims of one man.  But that confusion and uncertainty itself has everyone backing off, except those who will invest in the USA. Because they know that by 2026, the US under Trump will be really rolling.

Trump has to get this American renaissance going quickly before the midterms, where if the Democrats gain control, they could make him a lame duck President. He’s got 19 months to get the country rolling. This expected recession will hamper the stock market forecast and 2025 economic predictions. It doesn’t hamper the 5 year forecast because it’s expected these wrinkles will be ironed out by then and the US fiscal position will be much better. So the long term forecast is rosy.

While the three-month outlook is getting clearer, the 6 month outlook is more difficult to predict. Investment is growing fast but how long will it take to build factories and hire workers?  Will everything be resolved by October with consumers once again feeling good and spending?  And will the supply chain issues be resolved or will the country be mired in shortages and higher prices? For the next 3 months, taking President Trump at his word, the US economy will slide.

For tech investors, the pullback on tech stocks is remarkable. The NASDAQ got its butt kicked last week with losses it hasn’t seen since 2022. While Palantir might do better, you have to wonder about Nvidia and Google.

Just the fact consumers are suddenly negative and spending less (and heavily indebted) with bubbled up housing and stocks, it has to be considered a dangerous few months for the equities markets. Gold is outperforming and defensive stocks are winning. Check out which stocks will thrive during this big pullback.

Stock Market Experts Liked What They Saw

These market analysts still like the US stock market for this year. Tom Lee remains bullish

Here are the major market economist predictions for 2025.

Tom Lee discusses his bull market views and advises investors to relax from their wall of worry. He says market indicators are positive heading into year-end.  This is dated, but he was refering to US stocks that will benefit from the Trump trade.

With the move to the right politically, the Democrat media will see their voice and influence weaken considerably. Thus American’s will accept the free market, pro-work ethic and America-first agenda. That’s important to support labor market supply, cut government mispending, and keep wages under control.

Ed Yardeni speaks with Becky Quick of CNBC about his ‘7000 S&P’ outlook for 2026, and 10,000 goal for 2030.

Q1 2025: What’s Next for the Markets?

January saw a big move for cryptocurrency. The rise of the various digital coins is almost shocking. Yet President Trump is opening the door for this technology to enter the business financial system and retail/online system in earnest. Time will tell if it deflates the US dollar or makes the US dollar even stronger. Coinbase has exposure to all cryptocurrencies and thus may surge, but you’ll want to be cautious with all of them.

Energy stocks abound given the price of oil and the potential unleashing of demand and consumption in the US, and globally. Oil stocks still look good and energy is a strong sector.

Opportunity follows money, so it shouldn’t be a surprise to you that the AI stocks may be the best stocks to buy right now. Prices and P/E ratios are lofty yet the AI era beckons.  While cryptocurrency and oil are drawing money away from AI (Nvidia, Palantir, AMD, etc.), cryptocurrency needs processing power, data centers, and energy. That cocktail of stimulants should boost spending on AI and AI company profits.

Artificial intelligence will support massive gains in new services and devices which makes all previous products obsolete.  Data centers are the focus, but AI is supercharging everything. Expect the NASDAQ to do very well this year, and will pick up in H2 as the Fed begins easing rates.

Easing rate expectations may stimulate the housing market after we see home prices fall a little in the next 3 months. By summer some demand will return pushing up builder stocks such as Toll Brothers and DR Horton. However, right now, the AI trade is likely going to provide better returns. The housing market’s revival is still a ways off. Buyers right now are struggling with the down payment, and new condos are taking longer to sell.

Have a closer look at some of the projections for the next 3 months, 6 months and 5 years and overall it’s an optimistic picture. See the 6 month economic projections to gauge macro concerns.

Yahoo Finance Top Stocks to Buy

Is Yahoo Finance reliable for stock picking for 2025. They have a good set of tools to help you screen in the best equities to consider.  Yahoo Finance too, believed these stocks were good bets 10 months ago, and they still remain best bets today.

1. 1. Berkshire Hathaway Inc (NYSE:BRK) +4.17% in last month, p/e ratio of 9.24
   2. UnitedHealth Group Incorporated (NYSE:UNH) -2.67% in last month, p/e ratio of 20.5
   3. JPMorgan Chase & Co. (NYSE:JPM) +4.87 in last month, p/e ratio of 11.2
   4. Oracle Corporation (NYSE:ORCL) -2.24% in last month, p/e ratio of 41.6
   5. Merck & Co., Inc. (NYSE:MRK) +.62% in last month, p/e ratio of 885.91
   6. Bank of America Corporation (NYSE:BAC) +4.12% in last month, p/e ratio of 11.6
   7. General Electric Company (NYSE:GE) +15.21% in last month, p/e ratio of 19.88
   8. Broadcom Inc. (NASDAQ:AVGO) +12.55% in last month, p/e ratio of 42.4
   9. Danaher Corporation (NYSE:DHR) +4.09% in last month, p/e ratio of 45.2
   10. Union Pacific Corporation (NYSE:UNP) +2.57% in last month, p/e ratio of 24.2
   11. Intel Corporation (NASDAQ:INTC) +2.45 in last month, p/e ratio of 47.2
   12. Exxon Mobil Corporation (NYSE:XOM) +4.22% in last month, p/e ratio of 11.9
   13. Walmart Inc. (NYSE:WMT) +4.52% in last month, p/e ratio of 30.7
   14. Elevance Health, Inc. (NYSE:ELV) +1.79% in last  month, p/e ratio n/a
   15. Johnson & Johnson (NYSE:JNJ) +4.06% in last month, p/e ratio of 31.5
   16. Pfizer Inc. (NYSE:PFE) +.075 in last month, p/e ratio of 41.6

The next 3 months should be volatile and limited in price gains.  Enjoy your hunt for the best individual stocks to buy in 2025, but be sure you’re confident of which sectors will perform best, and how macroeconomic forces affects corporate earnings, opportunities and stock market predictions. Conditions change so quickly.

See more on the 6 month economic outlook, 6 month stocks outlook and the forecast for next week.