Financial Union News, November 27th (Editor: Bian Chun) Wells Fargo's senior global market strategist, Scott Wren, said that US stocks are expected to show strong growth in 2025, but investors should avoid a specific sector.

Earlier this year, Ren was bearish on US stocks and predicted an economic recession. Now, his opinion has reversed, and he expects a bullish background for US stocks in 2025. $S&P 500 Index (.SPX.US)$ Expected to rise to 6600 points by the end of next year.

In an interview with the media on Monday, Wren stated that this implies a 10% increase in the S&P 500 index from its current level, with the main driving factors being the resilience of the US economy and declining interest rates.

Wren added that inflation may bottom out in the short term, but in the coming years, it may be closer to the Federal Reserve's 2% target. He predicted that the Fed might cut rates by another 100 basis points, and the US GDP growth rate next year could stabilize around 2.5%.

"In this scenario, when you consider inflation – which may not be at the level the Fed hopes for, but also not too high – I believe there will be ample reason to increase stock holdings and expect good returns next year," he said.

This sector should be avoided.

Wren further stated that this is also a sufficient reason for investors to avoid defensive stocks.

"What we are working hard to do - if we see a significant market pullback, we will definitely do more - we hope to get more involved in cyclically sensitive industries in the domestic and foreign economies. So apart from defensive stocks, anything goes," he added, pointing out that the bank expects low returns in areas such as utilities, healthcare, and consumer necessities.

The views of Wells Fargo & Co. contradict some market commentators, who predict a significant rise in defensive stocks such as energy and utilities, industries considered to be the biggest beneficiaries of the artificial intelligence trend.

"With data centers and artificial intelligence, utility companies will benefit to some extent, but currently, from a mid-term perspective, their profits will not be so sensitive to economic recovery, and never will be," explained Rain. "So you must ask yourself: which industries, which companies will benefit from profit growth in an economic turnaround?"

Rain specifically pointed out that financial stocks will benefit from rising loan demand and falling interest rates. Large-cap stocks will also benefit because these stocks often have better cash flow, credit channels, and more products for consumers to choose from.

Wall Street is generally optimistic.

On Tuesday, the three major stock indexes in the USA collectively rose, with both the Dow Jones Industrial Average and the S&P 500 closing at new all-time highs. As of the close, $Dow Jones Industrial Average (.DJI.US)$ Rising by 0.28%, closing at 44,860.31 points, rising for five consecutive days; the S&P 500 index rose by 0.57%, closing at 6021.63 points, rising for the seventh consecutive day; $Nasdaq Composite Index (.IXIC.US)$ Rising by 0.63%, closing at 19174.30 points, rising for four consecutive days.

With Donald Trump elected as President of the USA, Wall Street is generally optimistic about the U.S. stock market outlook for 2025. Trump is expected to implement a series of pro-market policies.

However, considering the S&P 500 Index's increase of up to 26% this year, next year's increase will be more moderate compared to this year.

Deutsche Bank's outlook released this week predicts that the S&P 500 index may rise to 7000 points by the end of next year due to improved investor risk appetite and a revival in commercial activities.

Savita Subramanian, the head of US Securities and Quantitative Strategy at Bank of America, recently predicted that by the end of 2025, the S&P 500 index is expected to reach 6666 points, presenting an 11% upside potential from the current level of 6000 points.

Last week, both goldman sachs and morgan stanley predicted that the s&p 500 index could reach 6,500 points by the end of 2025, citing continuous growth in the us economy, strengthening corporate profits, and the Federal Reserve's interest rate cut path.

ubs group also pointed out in a research report last week that the s&p 500 index is expected to break through 7,000 points in the coming 2025, possibly recreating the prosperous scene of the historically famous "Roaring Twenties."

Editor / jayden