Oppenheimer chief investment strategist John Stoltzfus initiated a year-end 2025 S&P 500 target of 7,100 in a note to clients on Sunday night, marking the highest projection among strategists tracked by Yahoo Finance.
Within that call, Stoltzfus highlighted that recent price action has him confident the bull market will continue in 2025. He shared a chart that shows Consumer Discretionary (XLY) leading returns since the market bottom on Aug. 5, followed by Financials (XLF), Information Technology (XLK), and Communications Services (XLC).
Notably, Stoltzfus included another version of this chart with returns since the election. The leaders are same, just with smaller numbers. At large, a move into these sectors, and with many defensive sectors underperforming, shows a market that’s moved on from pricing in risks to US economic growth to projecting the economy will keep chugging along in 2025.
“The broadening of the market from the market lows on Oct. 27, 2023 along with ongoing rebalancing and rotation among sectors, market capitalizations (large, mid and small stocks), style (growth and value) and cyclicals and defensives suggest to us that the current bull market likely has legs strong enough to climb the proverbial “wall of worry” into and through 2025,” Stoltzfus wrote.
In some ways, the chart helps build the case that the market-broadening story has been underway. But a close look at these sectors, especially when considering Tesla’s more than 90% rally in the Consumer Discretionary sector since Aug. 5, the chart also shows us that the “Magnificent Seven” tech stocks haven’t left the party yet, either.
