- Some bulls on Wall Street see U.S. stocks turning in another year of huge gains as the worst fears of President Donald Trump’s trade war fade and the outlook on tariffs becomes more certain. If the S&P 500 posts a third consecutive year with a surge of 20% or more in 2025, it would be the first time that’s happened since the late-1990s market boom.
The stock market has been on a hot streak lately, notching record high after record high, and some bulls on Wall Street think the party isn’t over.
That marks a stunning reversal from the panic that gripped investors in April, when President Donald Trump’s “Liberation Day” tariffs shocked the world. Stocks, Treasury bonds, and the dollar crashed. Markets started pricing in a recession, and analysts slashed their forecasts.
But Trump put his most aggressive tariff rates on hold, corporate earnings remained robust, consumers stayed resilient, and stocks rebounded. Even foreign investors jumped back into U.S. markets. Meanwhile, his administration has negotiated several trade deals, including one with the European Union on Sunday that removes the threat of a damaging trade war.
Now that the fog of war is lifting, upbeat forecasts that predated Liberation Day are back, meaning stocks could put up big numbers again—as if the tariff shock from a few months ago was all just a bad dream.
On Monday, Oppenheimer chief investment strategist John Stoltzfus hiked his S&P 500 price target for this year to 7,100 from 5,950, reinstating the outlook he initially made in December 2024.
“This year reminds us of the classic Charles Dickens quote, ‘It was the best of times, it was the worst of times,'” he said in his latest note. “Although much uncertainty and worry prevailed for some time both with trade policy and geopolitical events, and given the multitude of potential outcomes, we’d note that cooler heads prevailed — leading to positive outcomes at least for now.”
He cited progress on trade negotiations, strong corporate earnings, and the Federal Reserve’s deft handling of monetary policy, which cooled inflation without causing a recession.
If the S&P 500 hits 7,100 this year, it would represent a gain of about 21% for 2025, marking a third straight year with a surge of more than 20%. That hasn’t happened since the late 1990s, when the U.S. economy and the stock market boomed.
Also on Monday, Morgan Stanley equity strategist Michael Wilson said the S&P 500 could reach 7,200 by mid-2026, explaining that he is starting to lean closer to that more optimistic “bull case” scenario.
He cited strong earnings as well as AI adoption, the weak dollar, Trump’s tax cuts, pent-up demand, and expectations for Fed rate cuts in early 2026.
Another member of the 7,000 club is Chris Harvey, Wells Fargo Securities’ head of equity strategy, who has stuck by his S&P 500 forecast of 7,007 even during the trade war.
Last week, he reaffirmed it, predicting big tech companies will continue fueling the stock market’s rally despite Trump’s trade policies.
“What we’re seeing is the winners continue to win,” he told Bloomberg. “The uber-cap companies have the higher margins, are gaining more market share. There is a real secular trend in AI that will continue.”
And over the longer term, this decade still looks like it will be another “roaring 20s,” according to market veteran Ed Yardeni, president of Yardeni Research.
On Monday, he backed his thesis, which he first posited in August 2020, as productivity advances, a wave of capital outlays, and the endurance of consumer spending will keep stocks buoyant.
“If the remainder of the decade continues to play out as the Roaring 2020s, we predict that the S&P 500 will start the next decade at 10,000,” Yardeni wrote in a note.
