New Market Forecasts for 2025 by Major Analysts
A growing pessimism is taking hold on Wall Street, as President Trump sticks to his pro-US agenda, putting the brakes on foreign imports, and bringing business back to America.
It’s a tough line of work for economists and stock market analysts in 2025. For perhaps the first time, the markets are completely controlled by President Donald Trump. And it’s a time of transition, and perhaps big losses for corporations who were all in on investing in Asia or Mexico.
Noted expert analysts are for the most part, adjusting their projections downward as they reluctantly acknowledge what should be obvious, that President Trump isn’t backing down on his tariff plan. It’s a transition period and the economy will be flat until it comes out the other side.
Tom Lee of Fundstrat says the market is oversold and a bottoming will be this week and we will have a v-shaped recovery this year. Investors just aren’t sure what’s going to happen in April. I suspect Tom believes President Trump will ease off as other countries back down from counter tariffs. Trump has said he punish them strongly for escalating. Tom says investors are too scared about all of this. The crashing of the euphoria isn’t justified. (BTW, in this YouTube Video, he feels Bitcoin could reach $150,000.
And William Lee of the Miliken Institute offered his advice on the matter of a US recession. He points out that imports only comprise 14% of the US economy. Bank of America states that U.S. exports account for just 11% of gross domestic product (GDP). The U.S. consumer, by contrast, accounts for nearly 70% of U.S. GDP. The losses here can easily be covered by US companies and consumers, and investors who have trillions in money markets.
Forecasts are All about the Resistance
The story of 2025 is all about all countries response to Trump’s goals. And as he finally breaks his opponents will, we’ll see Trump’s agenda and the American economy move onward and upward.
For investors, looking at the one year horizon is wise. By then, all the volatility and strife will be in the rearview mirror. We’ll likely be much higher than current estimates. Even Tom Lee is reiterated his bullish outlook, that this is all noise before the 2026 party. And with respect to a recession,
The more intractable they are about cooperating, the higher the tariffs and stronger the pro-US initiatives become. The state of the Dow Jones, S&P, NASDAQ, Russell 2000 depend on the battle between Trump and trade partners. The Democrats (and others) would like to amplify the friction and conflict to get political mileage out of it. Their media outlets are working hard to build resistance to Trump and sow further conflict. The furor about the import tariffs is affecting consumer outlooks and we could see more major selloffs like we’re seeing this week.
His whims, perspective, actions and goals have more influence on stocks, bonds and commodity prices than any other factor. He controls inflation, GDP, manufacturing output, international trade, global peace, and dictates what the Democrat’s woke media outlets will say next.
In defense of the waffling market forecasters, guessing at how the market and Democrat supporters in industry will respond to Trump’s pro-America initiatives is no easy task. Still, big picture, Trump said what he’s going to do, and at present he’s doing it. It’s obvious to anyone that the more resistance is made to his agenda, the higher the tariffs will go.
While he holds all the cards in trade and government spending, he has a long road ahead to repair his country. The US congress is his biggest concern as the Democrats conspire to derail his efforts to cut spending, increase foreign direct investment, and lower American taxes.
The Forecast for the Year Ahead
Putting out estimates for one month to 3 month to 6 month index levels are like pinning pins on a roller coaster trend chart. Currently, we’re seeing markets plummet until the tariff battle dust is settled. By the end of the next 3 months, due to tariffs and counter-tariffs, the economy should slow, as many are predicting. The key to the slide is that despite President Trump’s stimulative actions, the big US production machine can’t get moving fast enough. For the next 12 months, we’ll be in a rolling improvement of investment, construction and production.
In the meantime, nations such as Canada, Mexico, China, Germany, UK and France can continue to export to the US to maintain their revenues. They will be forced to lower their prices to keep existing business. Lower import prices would work well in Trump’s plans too. He is firm on the endless benefits of tariffs.
The 25% tariff is going into effect on Wednesday, and whether we’ll see a bigger drop in the S&P 500 depends on whether anyone antagonizes Trump, causing to make more counter threats.
These nations have loudly stated they will use counter-tariffs and fight Trump. That’s not wise given their dependence on the US. It is far better to negotiate and ask the President, “How can we help you!” Over the next 6 months as their economic situation worsens, their tone will change. President Trump knows this, so there is a purpose in making it tough for ungrateful trade partners.
S&P 500 Analyst Forecasts 2025
This chart compiles major analyst’s projections of the S&P 500. Read the post by Brandon Stockman about why these predictions are likely not likely. Yardeni of course, is recoiling from his earlier forecasts, however Oppenheimer, Wells Fargo, and Deutsche Bank’s outlook might be on the high side.
US Market Analysts Scaling Back Projections
Most of the widely known stock market analysts and prognosticators are pulling back on their previous projections of where the S&P 500 will sit at year-end.
A report in Yahoo Finance today shows Goldman Sach’s guesses about the level of tariffs President Trump would apply. They originally believe the tariff rate would be 10%, but of course the rate is at 25% minimum. GS has a new 3-month target of 5,300 and they have upped their forecast for a US recession to 35%. They also believe the US economy will bottom in about 4 to 5 months (July/August).
Ed Yardeni of Yardeni Research sees an even greater risk of a recession at 45%. He sees stocks declining about 12% from current levels to 4,900 at year-end. He pointed out a growing sign of stagflation is showing up in economic data, and consumer spending is declining. Today’s forecast release says:
The expected fallout from Trump 2.0’s Reign of Tariffs undercuts our former bullishness and dims the prospects of our base-case Roaring 2020s scenario for now. It has also drained confidence in the US economy on the parts of everyone from CEOs to consumers to investors. Recent data showing manufacturing faltering and purchasing managers paying higher prices suggest stagflation is already taking root. We’re dropping the odds we assign to our Roaring 2020s scenario from 65% to 55% and upping the odds of a stagflation scenario, which may include a recession, from 35% to 45%. That 45% is also the probability we see that the stock market’s correction will deepen into a bear market in coming months. Yet we still expect an up year, with the S&P 500 rising above 6000 by year-end
In Yardeni’s report, they mention the NFIB sentiment index (small business poll) which is interesting because Wall Street doesn’t care about small business in the US.
Goldman Sachs Updated Forecast
Goldman Sachs lowered its Q1 GDP growth forecast strongly (-0.2%) from their original estimate of 1.8% in January. They also pulled back their annual GDP forecast to 1.5% from 1.9%. Chief strategist David Kostin reduced his year-ending price projection for the S&P 500 by 500 points, to 5,700. That would be a 2% gain from current levels.
As I mentioned in the major stock market forecast post, US manufacturing will begin to ramp up later this year. So the current market pullback and economic moderation will work will to power up that improvement later on.
It’s important to note that many market analysts cite weak growth prospects as corporate earnings have topped out and a natural bear market has to come in play. Yet President Trump is rewriting the script and starting a whole new bull market built on this American resurgence. With all of the investment money coming in with latent US demand, business protection, lower taxes, and reduced industry and business regulations, the table is set for a monumental era for investors.
I would suggest you dig into the details of potential American consumer demand and how US companies will fulfill that demand. If you’re American or a US stock market investor, you should be delighted with your massive opportunities unfolding.
See more on the best stocks to buy right now and the best stock buy in the dip.
Enjoy more posts on the US stock market investing opportunities in 2025.
