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Jeremy Siegel said the S&P 500 will see gains of a maximum of 10% next year.
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The Wharton professor expects large technology stocks to see flat returns in 2025.
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But he said small and mid-cap stocks with low capitalization would rise.
the Standard & Poor’s 500 Jeremy Siegel said the engine will run on fumes in 2025 after a two-year scorching run CNBC on monday.
“I expect a much quieter year. I mean, we’ve had two busy years, 2023, 2024, so I expect the S&P will probably be in the zero to 10% range,” the Wharton professor explained, adding that dominant technology stocks could see in Market returns are “sketchy” next year.
The S&P 500 is up 26.5% so far this year. Both the United States and Global investors fueled the double-digit rise,Capture significant exposure to artificial intelligence. This AI craze has sent a number of technology companies soaring, making the S&P’s gains highly dependent on their performance.
But according to Siegel, the so-called Magnificent 7 stocks — which include names like… Amazon, Nvidiaand dead – You’re starting to fall behind.
“Maybe, for once, we will see relative weakness in large-cap stocks that have been so good for the market in the last couple of years,” he said, adding: “The S&P represents a third of those large-cap investors, if they then stumble.” “A year or even really, it will be difficult for the S&P to achieve anything like the gains we had in 2023 and 2024.”
Bank of America suggested that technology trading could trend For a periodic peak. Much will depend on future bond yields, as higher interest rates are likely to limit risk assets in 2025, the bank said.
Although technology has been a big catalyst for the S&P 500 this year, the election of Donald Trump has helped drive even greater gains in recent weeks.
Traders are betting that the next president will implement market-friendly policies that will boost neglected assets such as small companies.
Actually, a beanie Russell 2000 It is up 7% since the Nov. 5 election, as investors turn to local companies Gains from Trump’s deregulation and tax cuts Promises.
“Maybe the Mag 7 will do nothing next year, and these small- and mid-cap stocks — which are actually undervalued compared to others — will finally have their day in the sun,” Siegel said.
Some market watchers are less confident in the ability of small caps to rise further. A note published by Capital Economics last month noted that small businesses similarly rose after Trump’s first election victory in 2016, but Poor performance in 2017.
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