US stock surge in 2025? Here's how much S&P 500 index predicted to hit next year

US stock market is likely to trade in the positive threshold next year as Wall Street may witness S&P 500 index peaking to 6,700-mark, Reuters quoted HSBC.

HSBC on Friday stated that it expected the S&P 500 index to hit 6,700 by the end of 2025, on the back of robust corporate earnings growth and a resilient U.S. economy. The brokerage's current forecast implies an upside of about 10.3 per cent to the index's last close of 6,075.11, Reuters reported.

"We expect next year's equity returns to be focused on earnings growth as valuations are more stretched," HSBC analysts led by Nicole Inui wrote in a note. "Overall, we expect earnings to grow by 9 per cent incorporating a slower but still resilient U.S. economy and some margin expansion."


The benchmark index has had a good run this year, having gained close to 28 per cent so far, broadly boosted by the so-called 'Magnificent 7' stocks on the artificial intelligence boom.

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A resilient macro-economic backdrop, continued earnings growth and gradual easing in inflation also further supported the index.

The sequence and timing of the U.S. Federal Reserve's monetary policy changes, inflation levels and elevated valuations will be key topics for the equity market going into 2025, HSBC said.

Apart from S&P 500, Wall Street's other two indexes -- Nasdaq Composite and Dow Jones Industrial Average -- have rallied this year, as investors bought into heavyweight tech stocks in a bid to cash in on the euphoria around artificial intelligence.

US President-elect Donald Trump's win in the November 5 election provided further impetus. Analysts expect his tax-cut policies and looser regulations will support corporate performance.

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Advancing issues outnumbered decliners by a 1.06-to-1 ratio on the NYSE, and by a 1.56-to-1 ratio on the Nasdaq. The S&P 500 posted 26 new 52-week highs and nine new lows, while the Nasdaq Composite recorded 85 new highs and 68 new lows.

FAQs

Q1. What are three main indexes of Wall Street?
A1. Three main indexes of Wall Street are -- S&P 500, Nasdaq Composite, and Dow Jones Industrial Average.

Q2. When will Donald Trump take charge as President?
A2. Donald Trump will take charge as the US President on January 20.