It’s this time of year when Wall Street fortune tellers look ahead 12 months and try to predict the future of U.S. stocks. This time last year, no one writing about major sell-side companies expected their stock prices to do so well, rising 23% in 2024. The median forecast is for it to be flat, likely due to a meaningful sell-off that several bears have been calling for. The forecast for the previous year was basically the same. In retrospect, that lack of imagination almost seemed like a sign of contrarian bullishness.
Either way, something has clearly changed in Wall Street’s thinking. This year, the median strategist expects the S&P 500 index to end 2025 at 6,600, assuming a 12% gain at the time of writing. While bullish strategists have become bolder in recent years, most former bears have turned (in this year’s tally, only two strategists are predicting a destination below 6,000; Peter Berezin of BCA Research). While this development seems natural given the S&P 500’s unusual two-year history, it also points to new investors at risk in the year ahead.
