Wall Street bulls up for the second half of 2025
Add Axios as your preferred source to
see more of our stories on Google.
Illustration: Trent Joaquin/Axios
From JPMorgan to HSBC, big banks are rushing to strike a more optimistic tone in their midyear outlooks, with the stock market more than recovered from its April lows.
Why it matters: Strategists are looking past the geopolitical risks and focusing on what really drives stocks: earnings growth.
- That view is largely expected to continue this year despite tariff-driven uncertainty.
By the numbers: Of a sampling of 14 firms offering price targets on the S&P 500, only five forecast a year-end level below 6,000.
- Based on current levels, that means most strategists see stocks rising for the rest of 2025.
What they're saying: The latest moves in the S&P 500, and tech stocks in particular, are a signal that "everything that happened as a result of tariffs and Liberation Day has kind of been brushed to the side," according to Jay Woods, chief global strategist with Freedom Capital Markets.
Zoom in: Three big themes are driving the bulls.
- Belief in solid earnings growth, which Morgan Stanley expects to remain in the high single digits, and which Bank of America views as driven by consumer resilience.
- Conviction in the artificial intelligence trade, validated this week by Nvidia closing at a new record yesterday.
- For better or worse, the "TACO" trade remains, and market participants are largely convinced that tariff deals are coming.
Yes, but: Three big risks remain for investors.
- Market breadth is still an issue, JPMorgan expects narrow leadership that mirrors the big tech rallies of 2023 and 2024. Can rising tech stocks lift all market boats forever?
- The U.S. dollar is down nearly 10% so far this year, a potential signal that global investors are pulling back from American assets.
- The 90-day tariff pause deadline is just two weeks away, and there are hardly any deals.
What we're watching: Not all investors are ready to move past the tariff-driven uncertainty in the economy.
- Jay Pelosky, founder of TPW Advisory, is overweight non-U.S. equities and sees more upside in regions expecting stimulus-driven growth like Europe.
The bottom line: Headline risks aside, Wall Street pros seem convinced the path of least resistance is still up for the stock market this year.
