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Top Market Takeaways

Quick shot: U.S. equities continue to shine bright

PublishedJan 8, 2025

J.P. Morgan Wealth Management

    Top Market Takeaways Quick Shot

      2024 was a blockbuster year for the U.S. equity market, with the S&P 500 posting over 20% total returns for the second year in a row. While we expect total returns to moderate in 2025, we still see opportunities for investors and believe the U.S. will outshine its global peers in the year ahead.

       

      Corporate earnings growth is a key driver behind market returns and we believe U.S. companies are poised for solid low double-digit earnings growth this year. The exciting part? Every sector is expected to contribute to this growth in 2025, expanding beyond the more tech-led gains of 2024. This broad-based earnings momentum could give the market a nice lift, even as we expect equity valuations to compress a bit.


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      Our favorite sectors? We prefer industrials, technology, utilities and financials. We see them as well-positioned to capitalize on emerging trends such as the strengthening of global supply chains, the rapid adoption of AI, energy modernization and increased dealmaking activity spurred by potential deregulation.

       

      Of course, there are plenty of risks to consider from inflation to policy shifts but we're optimistic that the positives will outweigh the negatives, giving U.S. equity markets the room to keep climbing in 2025.

       

      Please see “Outlook 2025: Building on strength” for additional insights on our year-ahead outlook.


      S&P 500 earnings set to broaden out in 2025


      Sources: Refinitiv, S&P, Morgan Stanley Research, Full year EPS is sum of 4 quarters, Based on data available as of December 26, 2024.
      The graph portrays earnings growth for different sectors in the years 2024 and 2025.



      All market and economic data as of 01/07/25 are sourced from Bloomberg Finance L.P. and FactSet unless otherwise stated.


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      The Global Investment Strategy group provides investment insights to help support long-term wealth goals. The team’s economists, investment strategists and asset-class specialists pair real-world economic trends with rigorous analysis to develop i...

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      Disclosures

      Our Top Market Takeaways for January 8th, 2025.

       

      The information presented is not intended to be making value judgments on the preferred outcome of any government decision or political election.

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