Citing a robust U.S. economy, low inflation, and robust bottom-line growth potential in mega-cap technology stocks, Barclays revised its 2025 projection for the S&P 500 index on Monday to 6,600 from 6,500.
From the Friday finish of 5,969.34, the revised price target shows a 10.56% upward from the index and a 10% gain over Barclays's 2024 estimate of 6,000.
"Macro positives outweigh the negatives heading into next year," Barclays analysts said, showing hope for U.S. stocks. Key events anticipated to increase the index were the bank underlined as ongoing monetary policy easing by the Federal Reserve, less uncertainty following the U.S. elections, and a low unemployment rate.
Emphasizing the part Big Tech plays in fueling expansion, the bank also increased its earnings-per-share projection for the S&P 500 in 2025 to $271 from $268. "While Big Tech continues offsetting to the upside, most sectors are expected to be impacted by disinflationary margin pressure and slowing ex-US.S. growth in 2025," Barclays said.
Supported by economic growth, higher corporate earnings, and the Federal Reserve's planned rate cuts, the revision follows similar estimates from Goldman Sachs (GS, Financial) and Morgan Stanley (MS, Financial) last week, projecting the index could reach 6,500.
