BofA Global Research Expects 2025 to be a Year of Further Equity Market Strength Amid Macro Uncertainty

BofA Economists and Strategists Forecast the US Economy to Continue to Outperform and the S&P 500 to Reach 6666 by Year-end

NEW YORK, Dec. 3, 2024 /PRNewswire/ -- While we await key details on policy changes in the US, indications thus far suggest the outlook for 2025 could present big opportunities for investors. The US economy is on strong footing, with growing signs of a pickup in productivity growth as we head into the new year. In their newly released outlook for 2025, BofA Global Research economists and strategists expect US economic and earnings growth to outpace that of other developed economies, while US equities should start the year off strong and end 2025 with the S&P 500 at 6666. Policy changes, including tariffs, tax policy, and the regulatory environment, should have almost as much impact on the rest of the world as they will for the US. As the year progresses, international opportunities should present themselves: European stocks are forecasted to slow but rebound to current levels by year-end 2025, and in China, domestic stimulus measures should offset any slowdown brought on by changes to trade policies.

"In 2024, growth surprised to the upside and inflation moved in the right direction, allowing central banks to start easing, risk assets to perform well, and global equities to reach new highs," said Candace Browning, head of BofA Global Research. "But as we head into 2025, policy uncertainty has increased substantially. Many of the expected policy shifts should be positive for US equities, but a lot depends on their timing and how the rest of the world responds."

Key macro calls made for the markets and economy in the year ahead are:

BofA Global Research

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Bank of America

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