It wasn't the best way to start a new year.
On Jan. 2, the Dow Jones Industrial Average, the S&P 500, and the Nasdaq all ended in the red on the first day of 2025.
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Stocks ended down last week, continuing a slide that began before the New Year.
Is this a sign of things to come for the next 12 months or just a bad day at the office?
We could be heading into a tumultuous year as Donald Trump returns to the White House promising to impose tariffs and vowing to repeal 10 US federal statutes for every new one imposed.
Looking back on 2024, Jennifer Timmerman, an investment strategy analyst with Wells Fargo, said, "U.S. economic growth once again surprised to the upside while overseas economies saw another challenging year."
"Turning ahead to 2025, we expect the U.S. to sustain its leading-edge role in global growth, supporting our preferred tilt toward U.S. assets in diversified portfolios," Timmerman said.
Economist expects stocks to be less upbeat
"We believe the U.S. economy and markets will continue to outperform the rest of the world due to relatively stronger demographics, more potent fiscal stimulus, less regulation, and a more dynamic technology sector fueling greater investment spending growth," she added.
Jeremy Siegel, Wharton emeritus professor of finance, said during the Wharton Business Daily radio show on SiriusXM he expected the stock market to be less upbeat in the coming year.
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"We’ve had two really fantastic stock market years,” he said. “They exceeded my expectation this year with another 20% plus gain on top of what we had in 2023."
Siegel said he expects 2025 to be more muted, forecasting growth in equities from zero to 10%. A correction—a 10% drop—is certainly a possibility.
He saw the possibility of “some cool off” with tech stocks. Siegel noted that even as AI is trending strong, “there seems to be possibilities of more competition and some slowdown in that area” in 2025.
He said tech companies led by the Magnificent Seven—a septet of tech titans including Nvidia (NVDA) , Tesla (TSLA) , Microsoft (MSFT) , and Apple (AAPL) —have “brought home the bacon.”
“They produced earnings growth of 25% to 30%," Siegel said. But they’re one-third of the market. I could see them cooling in 2025 to maybe being flat on the whole.”