Investing.com -- BMO Capital Markets strategist Brian Belsky remains bullish on the U.S. stock market, predicting the S&P 500 will rise to 6,700 by the end of 2025.
In his latest market outlook, Belsky emphasizes that U.S. equities are in the midst of a "20–25-year secular bull market," which began in 2009 and has consistently delivered strong returns despite cyclical downturns.
Belsky acknowledges that while the "bull market can, will, and should slow its pace from time to time," the current economic landscape—marked by easing inflation, stable employment, and an accommodative Federal Reserve—creates a favorable backdrop for continued market gains.
He projects high single-digit price gains and double-digit earnings growth for 2025, describing this as part of a "path to normalization" following the volatile markets of recent years.
The strategist also highlights the resilience of the macroeconomic environment in 2024, noting that jobless claims and other indicators suggest further earnings growth is likely.
BMO expects the S&P 500 to achieve earnings of $275 per share in 2025, building on a double-digit growth trajectory established this year. Belsky asserts that the Fed's pivot to easing monetary policy will provide an additional boost to corporate performance.
From an investment perspective, Belsky advises a balanced approach, endorsing what he calls a "sector barbell" strategy. He continues to favor Technology as a growth driver while viewing Financials as undervalued.
Additionally, he sees potential in smaller-cap stocks, which showed signs of recovery in 2024, suggesting broader equity participation in the coming year.
While Belsky urges caution due to high valuations and the likelihood of a rotation away from mega-cap stocks, his long-term optimism remains intact. "We still see stocks continuing their upward trend for years to come," he concludes, underscoring his confidence in the strength of the secular bull market.