Bull Run in US Stocks May Have Just Started. Here's Why.

Analysts at Evercore ISI Research suggest that this stock-market rally is far from over. They project that the S&P 500 could soar to 6,600 by mid-2025, driven by the political landscape shaped by Donald Trump’s unexpected return to the White House and a potential Republican majority in Congress. Julian Emanuel, a senior managing director at Evercore ISI Research, notes that historical data indicates the current bull market, which began in October 2022, is still in its early stages. Typically, bull markets have lasted over 50 months and have seen an average gain of 152% over the past decade. However, the current bull market has advanced 65% and is only 25 months into its cycle.

The implications of a 'decisive and uncontested' victory by Trump and a possible 'red sweep' were unexpected, but such outcomes are likely to bolster policy expectations of deregulation that could further drive up the stock market. Evercore's forecast indicates an additional upside of 10.5% from Thursday’s closing level of 5,973.10.

Adding to the optimistic outlook, Carson Investment predicts a robust year-end rally, noting that many investors remain underinvested, having prioritized cash and bonds and missed much of the current rally. Historical patterns show that in years when the market was up by at least 17.5% heading into the final two months, gains continued through year-end. This pattern has repeated 14 times, with November and December typically showing strong performance.

While presidential influence is undeniable, broader economic indicators often play a more pivotal role for investors. The Federal Reserve remains optimistic about the economic outlook. During the overnight conference, Jerome Powell highlighted that both inflation and interest rates are trending downwards, aligning with the Fed’s expectations for continued economic growth and a healthy job market.