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Wells Fargo issues Wall Street's most bullish forecast yet for the stock market in 2025
Wall Street 2025 stock forecasts have a new high-water mark.
Wells Fargo equity strategist Christopher Harvey and his team issued a 2025 year-end target of 7,007 on Tuesday, the highest target among Wall Street strategists tracked by Yahoo Finance and a forecast that suggests the S&P 500 ( ^GSPC ) could rise more than 26% next year.
The target is just seven points higher than those of Deutsche Bank and Yardeni Research , which have called for the S&P 500 to finish 2025 at 7,000.
"On balance, we expect the Trump Administration to usher in a macro environment that is increasingly favorable for stocks at a time when the Fed will be slowly reducing rates," Harvey wrote in his 2025 equity outlook.
"In short, a backdrop where equities continue to rally."
Harvey added that stocks will rise in an environment where corporate margins continue to expand, the US economy grows faster than the current 2.1% consensus forecast, and there is a "slight late 2025 benefit from a pickup in M&A Activity."
Harvey sees a similar playbook to Bank of America's 2025 outlook , which laid out a case for US economic growth to drive gains in cyclical sectors.
Harvey believes the cyclical opportunity will be "catalyzed by upward GDP revisions and regulatory environment."
This includes a call for the S&P 500 equal-weighted index ( ^SPXEW ), which isn't overly influenced by moves of the largest stocks like the benchmark cap-weighted index, to perform well in 2025.
In other words, Harvey is the latest voice on Wall Street that expects the market rally to continue to broaden from the "Magnificent Seven" tech stocks to the other 493 members of the S&P 500.
Harvey wrote in his note he initially wanted to "lean contrarian," given concerns about bullish market sentiment, lofty stock valuations, and already solid economic growth.
But, Harvey wrote, "the data did not support" a weak or negative year for the S&P 500.
"2025 is likely to be a solid-to-strong year," Harvey wrote.
Josh Schafer is a reporter for Yahoo Finance. Follow him on X @_joshschafer .