Jeremy Siegel Sees Bull Market Charging Into 2025

Stocks appear well-positioned to rally further, likely boosted by sustained corporate tax cuts and lighter regulations under a Donald Trump presidency, WisdomTree and Wharton School economist Jeremy Siegel said.

“Corporate earnings have continued to impress, and with no immediate breakdowns in tech’s big players, I do not see a downturn for equities in the near term,” he said in a commentary Monday, adding that economic stability should persist given easing inflation on oil and ongoing cooling in commodity prices.

While Siegel expects further market gains in equities, however, results in 2025 aren’t likely to match this year’s rally, he wrote.

“The ‘bull market’ sentiment remains intact, though valuations remain a watch point. Expectations of earnings growth are very high for 2025, and although I see no immediate cracks in this positive outlook, especially as productivity gains support a 2-2.5% inflation rate consistent with a stable economic expansion, next year is not likely to produce the gains that this year did,” Siegel said.

Trump’s aggressive trade rhetoric, notably his threat to impose a 60% tariff on Chinese goods, causes worry for companies relying on those imports, but Siegel expects the rhetoric to soften.

Investors should watch developments on tariffs and the federal budget deficit under Trump for potential bond market volatility, he said.

“As the Fed inches closer to rate cuts and the Republicans settle into power, bond yields may trend upward. I see 4.5-5% as a more natural level for the 10-year bond to settle into,” Siegel wrote.

The brief post-election spike in bond yields “sends a clear warning to Washington: unchecked deficits will be met with higher yields and borrowing costs,” he warned.

Credit: WisdomTree