Stock Market Outlook for 2025: Uncertainty Amid Continued Growth

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Stock Market,2025,Economy

Despite robust economic growth and falling inflation, uncertainty surrounding the 2025 outlook for the stock market persists. Experts predict continued upward momentum, but warn of potential risks and the impact of President-elect Donald Trump's policies.

The S&P 500, which most people's 401(k)s track, climbed nearly 28% this year, as of Monday. The tech-heavy Nasdaq leapt a staggering 34% over that period; while the Dow Jones Industrial Average climbed 16%.

Consecutive years of strong stock market performance have posed a quandary for forecasters: Will high stock prices scare off would-be investors in 2025, or will momentum push shares even higher? Those tail winds are expected to keep pushing stocks skyward in 2025, experts said, but they cautioned about more-than-usual uncertainty that could prevent further gains or even amplify them. The biggest unknown for stocks in 2025, they said: President-elect Donald Trump. 'As we close the books on 2024 and peer into 2025, perhaps the uncertainties this time are of a magnitude beyond the norm,' Kevin Gordon and Liz Ann Sonders, a pair of investment strategists at Charles Schwab, said. Good news abounded for the stock market this year, in part because the economy defied doomsayers. The economy continued to grow at a solid clip in 2024, while inflation fell. That performance kept the U.S. on track for a 'at a robust 2.8% annualized rate over three months ending in September, the most recent period for which data is available. 'U.S. strength remains undiminished,' Seema Shah, chief global strategist at Principal Asset Management, told ABC News in a statement. Inflation has slowed dramatically from a peak of more than 9% in June 2022. A months-long stretch of progress earlier this year helped nudge the Federal Reserve toward its first interest rate cuts in four years. In recent months, the Fed has cut its benchmark rate three-quarters of a percentage point, dialing back its fight against inflation and delivering some relief for borrowers saddled with high costs. Over time, rate cuts ease the burden on borrowers for everything from home mortgages to credit cards to cars, making it cheaper to get a loan or refinance on

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