Quick shot: U.S. equities continue to shine bright
J.P. Morgan Wealth Management
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
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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J.P. Morgan Wealth Management
