Wall Street major analysts have basically released their annual forecasts, with an average prediction that the s&p 500 index will rise by about 10%, which is in line with historical averages. After the US stocks experienced two years of growth above historical averages, the general expectations of most strategists are currently in line with historical averages.

Analysts predict the s&p 500 index will range from 6400 to 7007 points. This means an increase of between 5% and 15% compared to last Friday's closing level of 6090 points. This range is narrower than last year's target range, with many analysts expecting a return on investment between 8% and 10%.

Here are the main factors analysts believe will affect the US stock market's performance in 2025.

President Trump, when elected, proposed some radical reforms to trade policy and business regulations. Some of these proposals, such as new tariffs and stricter immigration policies, are expected to adversely impact businesses, potentially dampening demand while triggering inflation. This uncertainty makes forecasting for the coming year extraordinarily difficult. Besides their baseline scenario forecasts, many strategists have been discussing bull and bear market scenarios.

However, negative impacts may be limited. Analysts believe that Trump's policies will not result in the worst outcomes. Instead, they view these as opening the door for more moderate policies. Furthermore, strategists believe that the positive factors brought by low tax rates and deregulation will offset any potential adverse effects.

Analysts expect the US economy to continue to grow. As job creation cools and household financial conditions normalize, economic growth may not be as robust as during the early stages of recovery. However, growth is still growth, which is favorable for income. A less hawkish Federal Reserve would be helpful.

Corporate profit margins are expected to rise. U.S. companies have not fully realized the measures taken in recent years to improve operational efficiency. This includes strategic layoffs and hiring as well as upgrading technology. Due to positive operating leverage, even moderate sales growth may translate into significant margin growth. Lower inflation should help reduce costs, but this may change with the evolution of trade policies.

Expected earnings growth will further expand. The current bull market is largely driven by the 'Magnificent Seven' tech giants' stocks, as these companies have seen very strong earnings growth. Analysts currently anticipate that as the growth of the seven giants cools down, the 'other 493' constituents of the S&P will achieve better earnings growth.

However, all strategists acknowledge that U.S. stock valuations are high, which they believe limits the upside potential. Nevertheless, high valuations do not necessarily imply low returns next year. Price growth in 2025 will be less associated with valuation expansion and more with earnings growth.

In summary: The fundamentals supporting earnings growth are solid. Current valuations are above historical averages, but they are not cause for alarm. As always, there is considerable uncertainty. However, overall, the outlook for the U.S. stock market is favorable.

2025 Target Price for S&P 500 Index

Below is a summary of 14 forecasts for the S&P 500 index target level in 2025 and EPS predictions, including key points from strategist comments.

UBS Group: 6400 points, $257

"After the stock market rebound following this year's Trump cabinet appointments, we expect the market to gently decline in the first half of next year due to slowing economic growth in the USA. Once earnings expectations fall to more realistic levels, the second half of 2025 should be better."

Morgan Stanley: 6500 points, 271 dollars.

Looking ahead to 2025, it is still important for investors to remain flexible regarding changes in market leaders, especially considering the potential uncertainties brought about by recent election results. This is also why we maintain a greater bullish-bearish bias than usual — base scenario: 6500; bullish scenario: 7400; bear scenario: 4600.

Goldman Sachs: 6500 points, 268 dollars.

We expect the net income margin to grow by 78 basis points to 12.3% in 2025, followed by a further increase of 35 basis points to 12.6% in 2026. Our economists believe the Trump administration will impose targeted tariffs on imported autos and some products imported from china. They also assume a 15% corporate tax on domestic manufacturers. Overall, the impact of these policy changes on our eps forecasts largely offsets each other.

JPMorgan: 6500 points, eps 270 dollars.

The usa stock market should continue to benefit from an expanding business cycle, american exceptionalism (which helps expand the ai cycle and profit growth), ongoing easing policies from global central banks, and support from the fed's QT reduction in the first quarter. Meanwhile, american households are benefiting from a tight labor market, sitting on record wealth (which increased by 10 trillion dollars in the past year, reaching about 165 trillion dollars by the second quarter of 2024, and has increased by 50 trillion dollars since the covid pandemic), as well as potential declines in energy prices. The intensifying geopolitical uncertainties and the constantly evolving policy agenda bring unusual complexities to the outlook, but opportunities may outweigh the risks. The benefits of deregulation and a friendlier business environment, along with the potential for enhanced productivity and capital allocation, could be underestimated.

CFRA: 6585 points.

This new target point integrates fundamental, technical, and historical factors, influenced by the expected growth of usa real GDP at 2.4% and s&p 500 index operating profit growth of 13%, supported by inflation data and declining interest rates. Following two years of double-digit growth, the historical return of the third year of a bull market, coupled with valuations being elevated relative to the 10-year average (using current forward pe, market cap to total revenue, total enterprise value to forward EBITDA indicators), has weakened our optimism, leading to a year-long price increase forecast below average levels.

Royal Bank of Canada: 6600 points, 271 dollars.

The data tells us that it will be another year of robust economic and profit growth, some political tailwinds, and some additional relief from inflation (which should lead to an increase in the PE of the S&P 500 index) can continue to drive the stock market higher in the coming year.

Barclays: 6600 points, 271 dollars.

For the USA stock market, we believe that macro bullish factors will outweigh the negative factors next year. … We expect that by 2025, most industries will be affected by anti-inflation profit margin pressures and a slowdown in growth outside the USA, while large technology companies will continue to offset the upward impact.

Bank of America: 6666 points, 275 dollars.

Get ready for cyclical hell. 9 reasons: (1) economic recession, (2) Federal Reserve interest rate cuts, (3) profit acceleration, (4) repatriation, (5) productivity cycle, (6) the shift from everyone spending on technology to spending on technology in all aspects, (7) municipal authorities renovating to attract businesses, (8) capacity tightness/underinvestment in manufacturing, (9) the positioning of cyclical industries is the lightest since at least the global financial crisis.

BMO: 6700 points, 275 dollars.

Bull markets can, will, and should slow down from time to time; it is a digestion period, which in turn only highlights the health of the long-term bull market. Therefore, we believe that the investment environment in 2025 will be more normalized, with performance across various industries, sizes, and styles being more balanced.

HSBC: 6700 points

"We expect next year's stock returns to focus on earnings growth, as valuations are becoming overvalued... Overall, we expect earnings to grow by 9%, including a slowing but still resilient USA economy and some expansion in profit margins."

deutsche bank: 7000 points, 282 dollars

"Attention is focused on late-cycle indicators, while early-cycle indicators have been rising. We see that various aspects of the cycle have yet to begin, including inventory reduction, capital expenditures outside of technology, capital markets andMergerloan growth, and growth in other parts of the world. Due to the potential policy changes that the new government may implement, which could have both positive and negative impacts on economic growth, sorting will be key, but we expect economic growth to remain a top priority. During several rounds of the last trade war, stock markets sold off as the trade war escalated, only to be eased later.

Yardeni Research: 7000 points, 290 dollars

"Immediately after Trump won the presidential election on November 8, 2016, we observed that the economy and stock market were stimulated by 'animal spirits', a term coined by John Maynard Keynes, meaning spontaneous optimism. Now that Trump has won a second term on November 5, the animal spirits have returned..."

Caitong Macro: 7000 points.

"These projections are based on the assumption that the US economy will not impede the stock market bubble, which has expanded amid the hype surrounding AI, and now appears bolder than ever. However, we do not mind raising our forecasts simply because the index has risen and reacted very positively to news of Trump's victory. A key reason is that we believe his policies will have a net negative impact on economic growth in the USA and other regions. Furthermore, if it is correct to exclude major fiscal expansion from feasible assumptions, US corporate profits may not see a boost from further cuts in corporate taxes. Nevertheless, we remain committed to the existing projections for the S&P 500 index, as we believe Trump's election will not disrupt the economy or prevent the expansion of the AI bubble."

Wells Fargo & Co: 7007 points, $274.

"Overall, we expect the Trump administration to welcome an increasingly favorable macro environment for the stock market, while the Federal Reserve will slowly cut interest rates. In short, it’s a backdrop for continued stock market gains."

Overall, Wall Street analysts remain bullish on EPS growth for next year. However, accurately predicting the market's trajectory a year from now is extremely difficult. In addition to countless variables that need to be considered, there are also completely unpredictable developments. As new information emerges, strategists often modify their targets. The stock price forecasts from major Wall Street firms should be viewed as a beijing compass technology development rather than GPS.