Stock Market Performance Over the Past 15 Years and Wall Street's Forecast for 2025
The S&P 500, a widely recognised benchmark for the overall U.S. stock market due to its scope and diversity, has been the subject of numerous forecasts for the year-end 2025. These predictions, made by Wall Street investment banks and research organisations, range from a median target of approximately 6,100 - a 2% gain from the current levels as of June 2025 - to a bullish forecast of 7,000 by Mary Ann Bartels from Sanctuary Wealth, representing a 12% jump.
The consensus estimate among 17 firms is cautiously positive, with typical upside in the low single digits. However, there are some optimistic calls that centre on AI-driven growth in technology stocks, which could push the S&P 500 towards new highs in 2025.
Wells Fargo is the most optimistic with a target of 7,007, implying an upside of 17%. Fundstrat and Deutsche Bank project targets around 6,600 and 6,550 respectively, with roughly 10-11% upside. Morgan Stanley, Yardeni Research, and UBS forecast between 6,400-6,500, corresponding to 7-9% upside. Goldman Sachs recently raised its target to 6,600, while other major banks such as Citigroup (6,300) and BMO Capital (6,100) expect smaller gains of 2-6%.
On the cautious side, Stifel and Bank of America project potential downsides of 6-8%. Sanctuary Wealth's Mary Ann Bartels stands out with a bullish forecast, seeing the S&P 500 hitting 7,000 by year-end 2025.
FactSet's bottom-up price target as of mid-2025 is around 6,764, indicating an expected 7.7% increase from the closing price of 6,280. Sectors like Health Care, Real Estate, and Energy are expected to see the largest price increases.
The consensus estimate for Q2 2025 earnings growth has been revised downward from 12% in January to 5.7%. This downward trend continues for Q3 and Q4, with estimates revised from 13.1% and 17.3% respectively, to 7.8% and 6.1%.
The S&P 500, which tracks 500 domestic equities, has historically recovered from every past drawdown, suggesting that investors who patiently buy and hold quality stocks may be well rewarded in the long term. Despite one recession and two bear markets, the S&P 500 returned 11.8% annually (excluding dividends) over the last 15 years.
It's important to note that the White House's imposition of sweeping tariffs is expected to raise prices and slow economic growth, posing a near-term downside risk for the S&P 500.
The index is rebalanced quarterly, but stocks can be added at any time. The 10 largest holdings in the S&P 500, by weight, are Microsoft, Nvidia, Apple, Alphabet, Meta Platforms, Broadcom, Tesla, Berkshire, JPMorgan Chase, and Microsoft. Companies in the S&P 500 must meet certain eligibility requirements, including GAAP profitability, a minimum market value of $20.5 billion, and a sufficiently liquid stock.
The current year-end targets and implied upside (downside) shown are current as of June 9, according to Yahoo Finance. Wall Street analysts have revised their S&P 500 forecasts for 2025, with most seeing less upside than they did pre-tariffs.
- To achieve a projected growth of 7,000 in the S&P 500 by year-end 2025, investors might consider investing in technology stocks, as this sector could drive AI-led growth and push the index towards new highs, according to optimistic calls.
- While the consensus estimate among 17 firms suggests a cautionary but positive outlook, with typical upside in the low single digits, some institutions like Wells Fargo predict a more optimistic 17% increase in the S&P 500.
- Monitoring the impact of the White House's tariffs on the S&P 500 is essential as they have the potential to slow economic growth and raise prices, posing a near-term downside risk to investors.
