Optimism on Wall Street rises again! Wells Fargo: S&P 500 is expected to aim for 7,007 points next year
Wells Fargo stock strategist Chris Harvey expects the S&P 500 to rise to 7007 points by the end of 2025, becoming the highest target among Wall Street strategists, with a potential increase of over 26% next year. He believes that the Trump administration will create a favorable macro environment, the Federal Reserve will gradually lower interest rates, and expanding corporate profit margins along with accelerating economic growth will drive the stock market upward. Harvey also mentioned that the market rebound will extend from technology stocks to other components of the S&P 500 index
The Zhitong Finance APP noted that Wall Street's forecast for the stock market in 2025 has reached a new high. On Tuesday, Wells Fargo stock strategist Christopher Harvey and his team predicted that the S&P 500 will rise to 7,007 points by the end of 2025, which is the highest target among Wall Street strategists, and they forecast that the S&P 500 index could rise more than 26% next year.
This target is only 7 points higher than the predictions from Deutsche Bank and Yardeni Research, which forecast that the S&P 500 index will close at 7,000 points in 2025.
"Overall, we expect the Trump administration to usher in a macro environment increasingly favorable to the stock market, while the Federal Reserve will slowly cut interest rates," Harvey wrote in his 2025 stock market outlook. "In short, this is a backdrop for the stock market to continue rising."
Harvey added that the stock market will rise in an environment where corporate profit margins continue to expand, the U.S. economy grows faster than the current general forecast of 2.1%, and "merger and acquisition activity slightly rebounds by the end of 2025."
Harvey sees a scenario similar to Bank of America's 2025 outlook, which argued that U.S. economic growth will drive cyclical sectors higher.
Harvey believes that "upward GDP revisions and regulatory environments will catalyze cyclical opportunities."
This includes the forecast that weighted indices such as the S&P 500 will perform well in 2025, as this index is not overly influenced by the performance of large-cap stocks like benchmark market-cap weighted indices.
In other words, Harvey is the latest voice from Wall Street, expecting the market rebound to continue expanding from the "seven giants" of technology stocks to the other 493 components of the S&P 500 index.
In the report, Harvey wrote that considering the bullish market sentiment, high stock valuations, and concerns about already solid economic growth, he initially wanted to "lean towards contrarian investing."
But Harvey wrote that "the data does not support" a weak performance or negative growth for the S&P 500 index this year. "2025 could be a year of transition from solid to strong."