S&P 500 and Nasdaq retreat from their records while Nvidia plunges

John Stoltzfus, chief investment strategist at Oppenheimer, gave a 2025 S&P 500 target of 7,100 for year-end 2025 in a note to clients Sunday evening, the highest forecast among strategists tracked by Yahoo Finance.

In this call, Stoltzfus emphasized that recent price movements make him confident that the bull market will continue in 2025. He shared a chart showing that consumer discretionary stocks (XLY) delivered the top returns since the market bottom on August 5, followed by financials (XLF). Information Technology (XLK) and Communication Services (XLC).

Notably, Stoltzfus included another version of this chart showing returns since the election. The leaders are the same, just smaller in number. Overall, entry into these sectors and the fact that many defensive sectors are underperforming shows a market that has moved from pricing in risks to U.S. economic growth to predicting that the economy will continue to advance in 2025.

“The expansion of the market since the market lows of October 27, 2023, as well as the ongoing rebalancing and rotation between sectors, market caps (large, mid and small stocks), style (growth and value), and cyclical and defensive stocks suggests this to us.” “The current bull market likely has strong legs to climb the proverbial “Wall of Worry” into 2025 and into 2025,” wrote Stoltzfus.

In a way, the chart helps support the thesis that the story of market expansion is already underway. But a closer look at these sectors, especially considering Tesla’s more than 90% rally in the consumer discretionary sector since August 5, also shows us that the “Magnificent Seven” technology stocks haven’t left the party yet.