2025 U.S. Market Outlook
2025 U.S. Market Outlook
Stratège en chef des investissements
Brian Belski, stratège en chef des investissements et chef du groupe Stratégie de placement, offre des conseils en matière de gestion de portef…
Brian Belski, stratège en chef des investissements et chef du groupe Stratégie de placement, offre des conseils en matière de gestion de portef…
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In his 2025 market outlook, BMO Capital Markets’ Chief Investment Strategist Brian Belski explains why U.S. equities will provide more balanced returns than the previous two years, and why a return to historical norms is a positive development.
For those looking for the broader North American view, you can watch Brian’s 2024 Canadian market outlook:
Hello, this is Brian Belski – Chief Investment Strategist at BMO Capital Markets
We recently published our 2025 Year Ahead Market Outlook, representing our 13th consecutive forecast on the US stock market on behalf of BMO.
As we expected, despite elevated Presidential election noise and emotion, geopolitical upheaval, heightened rhetoric surrounding concentrated equity performance, wavering inflation, not to mention a shifting Federal Reserve and interest rate environment, 2024 once again exhibited surprising equity performance. In fact, 2024 represented one of the only periods in our entire career where our investment strategy team had to increase our year-end forecast twice during the year. For our part, we remain resolutely bullish, with the stock market prowess demonstrated the last two years only reinforcing our longer-term view that US stocks remain fixated within a 20-25 year secular bull market that we believe began in 2009. However, as stocks enter year three of the more recent cyclical portion of this big bull market, we do believe performance and fundamentals will more closely match the historical norms – namely, in the high-single-digit / low-double-digit percentage range in 2025. In addition, we believe performance across most sectors, sizes, and styles will be more balanced – defining a period of broader performance across the entire spectrum of equities – which we believe is quite normal and healthy, that will ultimately ensure the stability and fortitude of the overall bull market in stocks. As such, our 2025 forecast for the S&P 500 Index year-end price target of 6,700 on earnings of $275 is a continuation of this thesis – and well within the historical average for stock market returns.
In terms of sectors in 2025, we favor Consumer Discretionary, Financials, and Technology; are neutral Communication Services, Energy, Industrials, Materials, REITs, and Utilities; while advising clients to underweight Consumer Staples and Health Care. In terms of size and style – we want investors to think of it as – everything in moderation – owning equal parts large, mid-, and small cap stocks – while also owning both value and growth together – thereby lacking a significant emphasis on any asset class in 2025. In essence, we own a little bit of everything.
Thanks so much for joining us – here’s to more balanced performance returns and a continuation of the secular bull market in 2025.
