Zhitong Finance learned that Barclays stated that against the background of economic recovery and strong corporate profits, the US stock market will continue to rise next year. The bank expects the S&P 500 index to increase by 10% to 6600 points, joining the ranks of top analysts' bullish forecasts. Their expectation reflects a slight slowdown in the index's increase compared to this year's 26% increase.

Barclays strategists led by the company's US stock strategy head Venu Krishna predict that driven by strong growth in technology company profits and economic resilience, the S&P index will climb another 10% next year to reach 6600 points. Their forecast marks a slowing down in the index's increase compared to the accumulated 26% increase since the beginning of this year, but they are optimistic that the economic environment will continue to support the stock market.

Analysts stated in a report on Monday: "The macroeconomic slowdown to a still healthy level should support further gains in the US stock market next year, although at a slower pace compared to the astonishing pace of 23 to 24. Positions seem constructive, and policy uncertainties create space for stock and industry selection."

Their optimism mainly stems from the strong US economy, with consumers - the 'central pillars' of the US economy and stock market - enjoying income growth and continuing to open their wallets, keeping the US economy strong.

Analysts wrote: "As the 'virtuous cycle' between total income growth and consumption remains intact, the US economy remains resilient. Concerns about household financial distress seem to have been exaggerated; overall delinquency rates remain low, and the proportion of borrowers' consumption and revolving credit to income is generally lower than pre-pandemic levels."

Analysts also pointed out that the profit growth potential of large tech stocks is strong, saying that Wall Street may be underestimating their growth. However, they acknowledge that large-scale corporate investments in artificial intelligence and investors' eagerness to see quick returns also pose some risks. Data shows that tech giants such as Alphabet (GOOGL.US), Microsoft (MSFT.US), Amazon (AMZN.US), and Meta (META.US) have already invested billions of dollars in AI infrastructure and are preparing to invest another $200 billion next year.

Analysts point out that inflation also poses a risk, especially if President Trump, if re-elected, implements his proposals for comprehensive tariffs and cracking down on immigration, both of which will push up prices until 2026. They also mentioned that this could lead to the Federal Reserve cutting rates less than expected, adding obstacles to the stock market.

Analysts explain, "The risks facing the stock market are not insignificant, especially as US Treasury yields have surged since September and are approaching historically unfavorable levels for the stock market. If fiscal expansion continues while rate cuts decrease, this could create problems."

However, they add that the policy roadmap remains uncertain, and the market has generally withstood tests of inflation and interest rates in recent years. Barclays and other major banks alike, expect the stock market to continue rising in 2025, despite unfavorable factors from policies and geopolitics intensifying, market sentiment is clearly bullish.

For the next year, forecasts from major banks and analysts are relatively optimistic and concentrated: UBS, JPMorgan, and Morgan Stanley all expect the S&P 500 index to reach 6,500 points next year, while Goldman Sachs, Royal Bank of Canada, and Bank of America's forecasts are around 6,600 points, and investment firms BMO and Bank of Montreal's expect the index to reach 6,700 points, with Yardeni Research and Deutsche Bank's forecast reaching as high as 7,000 points.