‘False sense of security’ on S&P growth: Portfolio manager.

Wall Street Expects Slower S&P 500 (^GSPC) Growth in 2025 Zacks Investment Management Client Portfolio Manager Brian Mulberry Joins Wealth to share its market outlook.

Mulberry expects markets to return to “normal” by 2025, with returns more closely aligned with earnings growth. He notes that the S&P has grown approx. 45% over the past two years, with much of the potential upside already priced in.

“This means that while we expect a good year with earnings growth of around 14%, we expect only subdued returns, maybe an 8 to 10% positive year,” he tells Yahoo Finance. Mulberry warns that investors currently have “a false sense of security” about 20% returns.

Mulberry projects that S&P 500 earnings could reach $280 per share. share at the end of 2025. However, he identifies a key concern: “Magnificent Seven” stocks account for about 70% of the expected growth. While he acknowledges that it is “good news” that these are highly profitable businesses with strong cash positions, their high contribution to earnings growth poses a risk of disappointment. He warns: “Any kind of disruption in that momentum will have an overall impact in terms of volatility.”

For 2025 investment opportunities beyond technology, Mulberry recommends defensive positions in financials, consumer staples and durables.

To see more expert insights and analysis of the latest market action, check out more Wealth here.

This post was written by Angel Smith