How will you invest in 2025 Market. Could S&P 500 soar to +7,400?

Below are the newest 2025 stock market S&P 500 price forecasts, ranging from 6,400 to 7,000. This implies a return of +5% or +15% from the December 5, 2024, adjusted close of 6,075.

We pulled through the cocaine bear market low (of 3,577 in October 2022). Clawed back victory on the back of 2023. Thank God, we survived the US Elections of 2024. We are now riding the irrational fumes of a Dark MAGA Bull Cycle. To make matters worse, Sports betting and Bitcoins are in vogue. Beware the finance bros with less than 0.00244 Bitcoin (BTC). They are up 40% and are over the moon for +$400 gains (pre-tax).

Will the speculation market come to a crashing halt? Or will we survive another +20% year? That answer is always hard to tell.

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Risks to Market Performance in 2025

After two years of above-average gains, most strategists expect an average of 10% returns. Based on economist predictions, there will be mild income growth (amid a tentatively-cooled inflation cycle). With federal rate cut expectations continuing intermittently through 2025, tread carefully.

The key risks to the S&P 500’s performance include policy uncertainty (especially in the first 100 days), high valuations, navigating wars and conflicts, and a drawn-out government fiscal adjustment cycle. The latter of which, will be problematic for the first quarter.

The market is poised for growth through March 2025 with a drop in the Second and Third quarters. Market optimists are looking forward to a rebound post-election cycle. Trade policies (specifically Tariffs) are making a resurgence. So far, it seems like a pivot point for global negotiations and a move toward a more balanced American production capacity.

With the spending-debt spiral increasing, the average American consumer is holding onto dwindling savings and mounting household debt. According to a WalletHub study, the average American household credit card balance was about $10,757, as of the third quarter of 2024. Translation, Houston we have a problem.

Prices aren’t going down anytime soon. It’s only slated to get more expensive from here on out.

A Recession in 2025? Or is it 2026?

The yield curve inversion – which occurs when the 10-year Treasury yields fall below 2-year yields – has “predicted” every recession since 1955. The yield curve is normalizing. The fed funds target rate of 5.50% on the upper end was historically high and had held steady since mid-2023.

The Fed implemented the first 0.50% rate cut in September 2024 and trimmed it an additional 0.25% in November. Longer-term bond yields trended higher with the 10-year U.S. Treasury yield moving from 3.63% to 4.44%.

With the opportunities in global equities, bonds are likely to generate lower relative returns in the near term. We should expect early shifts by February 2025.

Those who aren’t invested will still feel the pinch of cost inflation. According to the Bureau of Labor Statistics 2023 survey, the largest expenditures continued to be housing (32.9%), transportation (17%), and food (12.9%).

The annual inflation rate in the US decelerated to 2.6% in October 2024 but in line with market expectations. Average inflation since 2019 has clocked in at 4.20% with a cumulative inflation of 22.70%. What used to cost $100 in 2019 is now $123 in 2024 plus 30% Taxes and Tips.

The Average American is sitting on a Jenga-house of debt with meal delivery and Amazon Prime.

2025 Market Forecasts of the S&P 500

Now that the doom and gloom is over, time for the fun part. Here are the 2025 S&P 500 forecasts, segmented by my over-optimism, Bullish, and Bearish reaction as of December 10, 2024.

My Irrational Over-Optimism for the Market +7,400

My wife and I flipped a coin for this one. The TNFG S&P 500 target price is 7,486.

This effectively sets our return expectation to almost 28%. Well, that did it. I lost all credibility. This is our bold estimation yet.

Unlike the financial institutions that are too afraid to adjust to the new age, we have a hunch. The reset of 2022 shifted the market. The fat in labor and related benefits were trimmed. Companies are in a prime position to post great revenues in 2025.

We’ve been cleaning up our portfolio by shifting away from dividend holdings. Sometimes less is truly more. In our 401K(s), we will stick to life cycle plans to mitigate risk. The ROTH IRA accounts have become far more aggressive while favoring the top 10 positions in $QQQ.

The current plan is to cycle into the Energy and Financial sectors.

The Industry Standard Experts

Oppenheimer: 7,100 (implying a +18% gain). “The quality of economic, business, consumer, and job growth data from the start of the Fed’s rate hike cycle in March 2022 through the initial cuts to its benchmark interest rate in September and November.”
Yardeni Research and Deutsche Bank: 7,000 (implying a +19% gain). “Trump 2.0 represents a major regime change that’s bullish for the economy and stocks,” Yardeni stated.
BMO Capital Markets: 6,700 (implying a +14% gain). “Earnings growth is understated” and “the train has left the station” with the prospect of further gains as the Federal Reserve further lowers interest rates, BMO’s chief investment strategist Brian Belski told CNBC on Monday.
Bank of America: 6,600 (implying a +12% gain). The election “likely pulled forward the timing” of the returns associated with optimism from President-elect Donald Trump’s return to the White House in January, wrote Jason Draho, the group’s head of asset allocation, Americas, wrote to clients last week.
Goldman Sachs and Morgan Stanley: 6,500 (implying a +10% gain)
- It’s a view “predicated on continued U.S. economic expansion” and bolstered by the forecasted 11% earnings per share growth for the 500-company index. Notably, the Goldman group led by David Kostin predicts 2025 will be the slimmest relative outperformance of the “magnificent seven” stocks of the U.S.’ seven largest companies since 2017, reversing a trend of extended market-beating returns from the group led by AI leader Nvidia and iPhone maker Apple.
- Morgan Stanley noted “wider than normal” risks to its forecast due to “the potential uncertainty that the recent election outcome introduces.” They added that there is a best bull case target of 7,400 for the S&P (+26% potential with a possible 28% correction).

The Little S&P Bear Pessimists

UBS: 6,400 “The bank’s strategists see a 9.2% upside over the next 15 months, driven by a combination of earnings growth and improving economic conditions.”

Breaking News

Where will the market ultimately land?

Expert Wall Street strategists are always all over the place with their predictions.

At this point, I’m convinced they merely say things for shock value or one-up each other like an episode of The Price is Right. You can’t convince me that their ancestor didn’t dance for rain or sacrifice a bit of virgin blood. It’s just pure divination at this point due to the volume of retail traders, large whale movements, and boomers retiring from equity positions.

The name of the game is Buy Low and Hold for Dear Life (#HODL), with the implication that Today’s Highs are Tomorrow’s Lows.

The average S&P 500 forecast for 2025 is 6,600 according to a Bloomberg survey. But I’m holding firm on 7,400 toward the ball drop.

I would love to believe that we are past the shenanigans of the market so we can float to the irrational new Super Bull cycle.

However, no matter how 2025 plays out, long-term investors will always benefit later on. Whenever that later might be. I imagine the US economy like a car on Fury Road. Straight Mad Max and instead of stopping for gas and mandatory maintenance, we are siphoning the future out of the bottom half of society just to fuel today’s economy.

Time will tell. But just in case, invest and squirrel away as much as you can for your household.