A leading Wall Street strategist predicts that the stock market rally will continue through mid-2025 but face a significant pullback by year-end. Tom Lee of Fundstrat projects the S&P 500 to rise about 16% from current levels to 7,000 before retreating to 6,600 by the end of the year, resulting in a full-year gain of around 9.4%. The strategist attributes this outlook to a combination of factors, including the Federal Reserve’s increased focus on employment and potential policy changes from the incoming Trump administration.
Lee identifies strong tailwinds supporting stocks in 2025 but also notes significant risks, particularly tariffs and potential spending cuts. Despite these concerns, Lee remains optimistic about bitcoin, forecasting it to reach $250,000 next year. Fundstrat’s projection is based on historical patterns, which show that such rallies often struggle during the third year. The strategist gained prominence in 2020 for correctly calling a rebound rally after the pandemic sell-off and has maintained his bullish stance on stocks.
Source: https://www.cnbc.com/2024/12/11/tom-lee-who-nailed-2024s-rally-is-out-with-his-2025-outlook-what-he-sees-next.html