Despite concerns about inflation and potential trade wars, analysts predict a positive year for global stock markets, with US shares leading the way. While the S&P 500 is forecast to rise around 9%, with varying targets from different institutions, UK stocks are also anticipated to see gains, though at a slower pace.
Gains in US shares are expected to lead the way next year, but there are concerns there will be fewer opportunities for interest rate cuts. Global stock market s are tipped to keep rising in 2025, led by more gains among US shares, despite anxiety about inflation and fears that Donald Trump could spark a new trade war.
Wall Street analysts are forecasting the S&P 500 will rise by roughly 9% in 2025, taking the index of US companies up to about 6,500 points by the end of the year, according to Bloomberg data. Deutsche Bank’s chief global strategist, Binky Chadha, has a bullish 2025 year-end S&P 500 target of 7,000 points, while Goldman Sachs predicts it will be 6,500 points. UBS has it slightly lower, at 6,400 points, and predicts returns will be “backloaded”, with mild losses across equities expected in the first half of 2025. But once earnings estimates fall to more realistic levels, the second half of next year should be better, it predicts. Justin White, a portfolio manager at the US investment firm T Rowe Price, says there is an undertone of nagging uncertainty, even though the markets quickly recovered from. Stocks are expected to rally in London next year, but – as in 2024 – not as quickly as on Wall Street. Goldman Sachs predict the. The brokerage firm AJ Bell has a higher target of 9,000 points by the end of 2025, arguing that “prevailing gloom” means UK equities look cheap on an earnings and yield basis. “Total returns from the UK stock market in 2024 handily beat cash, bonds and inflation, but the poor comparisons with the USA remain the stick with which the FTSE 100 is constantly beaten,” said Russ Mould, AJ Bell’s investment director. The rest of Europe’s markets are expected to lag behind, with Goldman Sachs predicting “positive but low returns” for the pan-European STOXX 600 index
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