US stocks had a stellar performance in 2024 for the second year in a row. Uncertainty looks set to increase in 2025 as analysts see moderating returns. Alphabet, BYD, CVS, Merck and RingCentral are top picks for 2025. With just a handful of days left to trade equities in 2024, traders are now looking to 2025 and beyond for guidance on the road ahead.
The four sessions surrounding Christmas on Wednesday, December 25, will feature continued trading, though Christmas Eve will see a shortened trading session. Then the market reopens on Monday and Tuesday next week – December 30 and 31 – before closing again for New Year’s Day. Goldman Sachs has put forth the most prominent outlook for 2025, positing that the S&P 500 will close at 6,500 at the end of the year. That estimate implies that the index will rise about 9.6% above the current level. Still, the index plunged last week in light of the Federal Reserve’s (Fed) newest dot plot predicting just two 25 bps interest rate cuts next year, so the index could end lower than its current perch by the end of 2024. After all, the S&P 500 broke below its 50-day Simple Moving Average (SMA) on Wednesday, December 18, the first time that has happened in over three months. Stocks in 2024: Second consecutive standout year Before we look ahead, we should reflect on the achievements and failures of this year before projecting the market’s trajectory. The S&P 500 ended 2023 at 4,769 after moving out of a rut in October of that year. January 2024 then began the impressive run-up that concluded with the “Trump bump” that followed his election win in November. The S&P 500 has gained a thunderous 24% thus far in 2024. Equities were on a tear all year as traders thundered back in from the bond market with the expectation that the Fed was imminently prepared to cut interest rates as inflation got under contro