As the new year begins, Americans are holding on to the same bullish stance they adopted in 2024. According to our latest Bear or Bull survey, 66.1% of investors remain optimistic as we head into 2025, encouraged by the S&P 500’s performance in eight of the past eleven months. The S&P 500 also marked a historic milestone as it gathered consecutive annual gains of over 20% for the first time since the late 1990s, with 2024’s performance matching 2023’s 24% rise.

• The tech sector dominated 2024’s gains, with the Nasdaq surging over 31%, while the Dow climbed a more modest 12%.
• Major banks are projecting continued growth, with JPMorganJPM
  , Morgan StanleyMS
  , and Goldman SachsGS
  forecasting a ~10% upside for the S&P 500 to reach ~6.5K by 2025’s end.

Looking ahead with caution: While the consensus points toward continued growth, some analysts warn of potential headwinds. Bank of America’sBAC

strategists note that while many anticipated policy shifts could benefit US equities, their success hinges on timing and global response. The possibility of resurgent inflation, particularly if aggressive trade policies materialize, could derail the Federal Reserve’s rate-cutting plans and challenge the market’s momentum. The market’s remarkable two-year run of nearly 60% gains leaves little room for error, suggesting investors might need to temper their expectations for a third consecutive year of exceptional returns.