New Year, Same Bull?
January 2025
Market Review
As the new year is underway, there’s the usual sense of renewed optimism and excitement over new opportunities. Looking back, 2024 clearly echoed many of the themes from the prior year. By and large, the U.S economy continued to surge to new heights and have strong upsides. Stocks continued their strong performance, driven by powerful trends in artificial intelligence and technology. In the commentary below, we discuss the possibilities of a third birthday for the bull along with 2025 market expectations.
2025 Expectations
A “bull” is a trend in a financial market characterized by rising prices and investor optimism. The current bull market has entered its third year, having celebrated its second anniversary on October 12, 2024. A resilient economy, unwavering trends in technology, and moderating inflation have driven much of the gains. These economic foundations have remained strong thus far in the new year. Prospects for solid returns in 2025 are favorable if the economy avoids recession as highlighted in the chart “S&P 500 Index Bull Markets (1950 – current)”. Though, that does not mean we should not expect volatility, as no market environment is ever permanent. Key risks include rising interest rates, an uptick in inflation, tariffs, and bearish sentiment. Based on this backdrop, it could be possible that a pullback remains on the table.
S&P 500 Index Bull Markets (1950 – current)
Source: LPL Research, FactSet 12/24/24
Disclosures: All indexes are unmanaged and cannot be invested in directly. Past performance is no guarantee of future results. The modern design of the S&P 500 Index was first launched in 1957. Performance before then incorporates the performance of its predecessor index, the S&P 90.