Sp 500 Will Have A Normal Year

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Sp 500 Will Have A Normal Year

SP 500 Will Have A Normal Year In 2025

The SP 500 index had 2 consistent years where the gains crossed the 20%. However, Wall Street experts believe that 2025 will be a different and more normal year for the US stock markets.

According to the chief strategist from BMO Captial Markets, the SP 500 target price for the end of 2025 will be 6700. Similarly, the chief strategist from Morgan Stanley has set a target price of 6500 for the SP 500 by end-2025.

SP 500 To Touch 6,700

This means the SP 500 could gain around 14% upside from its recent closing price. The bottom line is that experts believe that the SP 500 will cross 6000 points next year.

But if the SP 500 somehow manages to close this year with +20% gains, it will be the first such instance since 1999 (tech bubble).

There's no doubt that 2025 will be the year when the outsized returns from the SP 500 will come to an end. After all, returns above 20% are not something that keeps going on for an extended period of time.

According to experts, it's now time for the US stock markets, including the SP 500, to take a breather and relax. It is entirely normal for the bull markets to slowdown and is regarded as a healthy activity.

That's why, it makes sense to think that 2025 will bring us closer to that normalized environment where the returns are in line with historic performance.

Also, historic performances show that the returns during the 3rd year are usually lower than the first 2 years. In fact, the returns from year 3 usually dip below the average returns of the index.

Also, money will flow out of the technology mega-cap stocks and will find its way into other stock market sectors. So, that's also something that will make it difficult for the SP 500 to make outsized gains in 2025.

However, that's not to say that the SP 500 will turn negative or enter into a full bearish cycle as we enter in the 2025.

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