Barclays projects an optimistic outlook for the S&P 500 in 2025, driven by a resilient US economy, leadership from Big Tech and a favorable macroeconomic environment. In line with the forecast of other banks.
Barclays raised its forecast for the S&P 500 index in 2025 to 6,600 points from 6,500supported by the resilience of the US economy, a gradual decline in inflation and strong earnings growth potential for mega-cap technology stocks.
The revised forecast represents a 10.56% increase from the index’s close of 5,969.34 on Friday and a 10% increase from Barclays’ estimate of 6,000 by 2024.
“For US stocks, we believe positive macroeconomic factors outweigh negative ones heading into next year” analysts at the London-based bank wrote in a note.
The Fed in the crosshairs of the banks
The US Federal Reserve is expected to continue with its monetary easing cycle, while post-US election uncertainty has resolved and the unemployment rate remains low, factors that could boost the benchmark index, Barclays said.
Last week, both Goldman Sachs and Morgan Stanley predicted that the index could reach 6,500 points, based on continued growth in the UShigher corporate profits and the path of Fed rate cuts.
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Big Tech will continue to drive gains for the S&P 500, said Barclays, which raised its earnings per share estimate for the index to $271 from $268.
“We expect most sectors to be affected by disinflationary pressure on margins and slowing growth outside the US in 2025, while large technology companies will continue to compensate on the upside,” Barclays added.
Additionally, Barclays upgraded its rating for the US industrials and healthcare sectors, while downgrading consumer staples and utilities.
Source: Ambito
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