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Stocks could see further gains, buoyed by a “supportive” macroeconomic environment, according to Ulrike Hoffmann-Burchardi, UBS Financial Services’ global head of equities. In a recent statement, she emphasized that high valuations are not a definitive predictor of returns over the next year, highlighting that earnings growth and Federal Reserve policies have historically wielded more influence on market performance. She noted that strong earnings and an accommodating monetary policy led to stock market successes in 1999 and 2021, even as valuations climbed. Conversely, in 2000 and 2022, rising interest rates and stagnant earnings momentum hurt stock performance. “The macro backdrop this year remains supportive, and we do not see any negative catalyst on the horizon that could drive a material derating,” Hoffmann-Burchardi affirmed.
Supporting this view, BMO Capital Markets raised its year-end target for the S&P 500 to 7,000, suggesting about 6% upside from recent closing prices. Brian Belski, the firm’s chief investment strategist, attributed the optimism to resilience in U.S. economic growth and the labor market. He noted that fears over tariffs impacting earnings growth have been overstated, mentioning that rising contributions from the broader index are offsetting any declines from a few dominating mega-cap stocks. As the S&P 500 recently hit new highs, Belski is prepared to “chase this bull market,” hinting that the 7,000 target could be conservative. However, he cautioned that markets rarely move in a straight line, predicting a potential settling phase should the index hit that mark.
Consumer sentiment took a dip in September, landing at a reading of 55.1-just shy of analyst forecasts. This represents a 5.3% drop from August and a stark 21.6% decline year-over-year. Joanne Hsu, survey director at the University of Michigan, pointed out that sentiment waned across various demographic sectors but remained stable for those with significant stock holdings. While independent and Republican respondents expressed diminished optimism, Democrats reported an uptick in sentiment. Inflation expectations are steady, with one-year projections at 4.7% and five-year estimates at 3.7%, reflecting ongoing consumer concerns regarding persistent high prices.
On the trading front, U.S. stocks saw gains on Friday, with the S&P 500 rising 0.4% shortly after the market opened. In pre-market activity, notable moves included Paccar, which surged 7% following tariff announcements on imported trucks, and Intel, which rose 4.4% amid reports of potential investments from major tech firms. Conversely, furniture stocks faced pressure, with RH dropping nearly 4% after tariffs on upholstered furniture were announced.
In inflation news, the core personal consumption expenditures (PCE) price index rose 2.9% year-over-year in August, align with Dow Jones expectations. This result likely keeps the door open for future rate cuts. Meanwhile, Costco’s shares slipped nearly 1% in pre-market trading following a quarterly report that showed underwhelming same-store sales growth despite impressive earnings.
As economic experts continue to evaluate the impact of Federal Reserve actions, Fundstrat Global Advisors’ Tom Lee emphasized that even one more rate cut this year could be interpreted positively by markets. He noted that such a cut would likely indicate a robust economy rather than a weak one, fostering optimism.
In summary, while the macroeconomic landscape appears favorable and stock market resilience holds, consumer sentiment reflects caution amid persistent inflation challenges. Analysts remain bullish, positioning for potential market gains ahead.
Original Source: https://www.cnbc.com/2025/09/25/stock-market-today-live-updates.html
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Publish Date: 2025-09-26 22:02:00
