For the first week of 2025, which ended Jan. 4, stocks closed lower. Although the S&P 500 (IVV) and Nasdaq (QQQ) jumped by 1.26% and 1.77% respectively, volatility increased.
Technology investors bought Nvidia (NVDA) and Super Micro (SMCI), along with nuclear energy suppliers like Vistra (VST) and Constellation Energy (CEG). Fortunately, the broad rally suggests that stock markets for 2025 could perform well again.
To sustain an uptrend, companies need to post earnings growth. Still, sell-off risks remain in isolated sectors. For example, steel suppliers will slump after President Joe Biden vowed to block a merger. Biden will prevent Nippon Steel from buying U.S. Steel (X).
Beer and alcohol stocks fell last week after the U.S. Surgeon General posted an advisory on cancer risks associated with alcohol consumption. Molson Coors (TAP) lost 10.10% in the last month. Ambev (ABEV) peaked at over $2.30 last month and closed at $1.77.
For 2025, UBS is forecasting the S&P 500 will return over 12%. David Lefkowitz believes that profits will grow by 9%. However, headwinds to that prediction included the trade policies ahead. Fiscal battles in Congress, high inflation, and prospects in artificial intelligence will increase the market’s volatility this year.
