Will stocks continue to rise? 12

This article answers “will stocks continue to rise” by examining macro drivers, earnings, valuation and market‑structure dynamics for the next 12–24 months. It synthesizes recent strategist views, ...

2025-08-14 00:16:00

By Meta Cipher

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Will stocks continue to rise?

Lead summary

Will stocks continue to rise is a central question for investors after an extended rally in large‑cap U.S. equities. This article treats the question as an inquiry into whether major equity markets — primarily U.S. large‑cap indices such as the S&P 500 and the Nasdaq — will keep appreciating over the near‑to‑medium term (the next 12–24 months unless otherwise noted). We review the recent market context, the fundamental drivers analysts cite for further gains, valuation and index‑structure dynamics, macro indicators and market signals to monitor, downside risks, Wall Street scenario ranges, technical considerations and practical investor responses. The goal is neutral, fact‑based perspective grounded in published outlooks and verifiable data.

As of December 30, 2025, according to major outlets and published strategist notes cited below, markets have been driven by concentrated mega‑cap leadership and the AI investment cycle; whether those forces sustain future returns is the essence of the question: “will stocks continue to rise?”

Background / recent market context

The U.S. equity market delivered a strong run through 2024–2025. As of late December 2025, the Nasdaq Composite showed roughly a 21% gain for 2025 year‑to‑date, while the S&P 500 was up approximately 16% over the prior 12 months and materially higher over the multi‑year window. As of December 30, 2025, multiple press outlets and strategic notes characterized the rally as concentrated: a handful of mega‑cap technology leaders (often grouped as the “Magnificent 7”) accounted for a disproportionate share of total returns.

As of December 30, 2025, financial reporting showed Apple with an approximate market cap near $4.0 trillion and Alphabet near $3.8 trillion; Nvidia and other AI‑linked names reported multi‑trillion dollar market caps in coverage from sector reporting during the year. (Source: company market‑cap figures cited in December 2025 market reports.)
Analysts and asset managers pointed to AI‑driven capex and software adoption as a key structural tailwind across technology and select industrials. JPMorgan and other large banks framed the near‑term outlook as an AI‑led earnings expansion that could support elevated index levels if the projected earnings growth materializes.

A contrast between capital‑weighted and equal‑weighted returns has been notable. Capital‑weighted indices like the S&P 500 and Nasdaq have been boosted when the largest companies perform strongly; equal‑weighted versions of the indices showed more muted gains, which signals that breadth — the number of stocks participating in the rally — has been narrower than in some prior bull phases. Reporting from outlets such as CNBC and Investopedia emphasized concentration as central to interpreting headline returns.

Why this matters: a concentrated advance driven by a few mega‑caps can lift headline indexes while leaving many stocks unchanged or lower. That divergence affects the question “will stocks continue to rise” because continued headline gains may hinge on continued leadership among the largest names rather than broad‑based corporate strength.

Fundamental drivers that could support further rises

Analysts point to several upside catalysts that could sustain or extend equity gains over the next 12–24 months. These drivers are largely measurable — earnings trends, monetary policy changes, consumer spending and fiscal/regulatory decisions — and many firms publish scenario analyses that tie index paths to these variables.

Corporate earnings growth

The most direct support for higher stock prices is rising corporate earnings per share (EPS). Several major banks and strategists have published forecasts that assume multi‑year earnings growth, in part driven by AI adoption and related capital expenditure from cloud hyperscalers and enterprise software buyers.
As of late 2025, some institutions (e.g., JPMorgan) projected aggregate S&P 500 average earnings growth in the low‑to‑mid‑teens annually for the next one to two years under an “AI supercycle” assumption. That kind of EPS growth, if realized, can justify higher index levels even if multiples do not expand.

AI‑driven capex and reacceleration of tech revenue

A broad institutional build‑out of data centers, AI chips, and software has increased revenue prospects for hardware, cloud and semiconductor firms. Public company reports through 2025 note accelerated spending on AI infrastructure. If capex translates into sustained revenue growth and margin improvement across suppliers and software vendors, corporate profits across sectors could rise.
Case notes: Nvidia reported constrained supply and high demand for GPUs through 2025; software firms like Amplitude and AI‑native cloud services reported strong ARR trends in late‑2025 filings cited in industry coverage.

Monetary policy easing (rate cuts)

Easier U.S. monetary policy — a sequence of Federal Reserve rate cuts or a materially slower pace of hikes — tends to support equity valuations through lower discount rates and improved risk appetite. Strategists often present “Fed‑cut” scenarios as a material upside for multiples.
As of December 30, 2025, Fed guidance and inflation trends were central to macro forecasts; many banks published conditional outlooks that assume at least one or more cuts across 2026 depending on inflation trajectories.

Strong consumer spending and resilient services

Continued strength in consumer spending, particularly service‑sector consumption and durable goods replacement cycles (e.g., device upgrades), supports revenue for consumer‑facing and retail companies. Walmart’s reported e‑commerce growth and expanding ad revenue were examples cited in late‑2025 reports as structural margin tailwinds for retail incumbents.

Favorable fiscal or regulatory moves

Targeted fiscal stimulus or regulatory changes (e.g., incentives for domestic semiconductor production, tax credits for R&D or clean energy) can accelerate sector‑specific earnings. Policy developments and legislative outcomes are scenario inputs in many bank outlooks.

In combination, these drivers form the “bull case” that underpins many optimistic forecasts. However, whether these forces are sufficient to answer the question “will stocks continue to rise” depends on execution (corporate results) and the broader macro path.

Valuation and market‑structure dynamics

Understanding valuations and index mechanics is crucial to assessing sustainability. Two distinct valuation effects matter: multiple expansion (investors paying more per dollar of earnings) and earnings growth (actual EPS increases).

Valuation overview

Price‑to‑earnings (P/E) ratios for broad indices rose during the rally as investors bid up growth expectations. If earnings rise in line with expectations, high P/Es can be supported; if earnings disappoint, multiples can compress and drag prices lower.
As of December 2025, the market’s aggregate valuation metrics — including the Buffett indicator (market cap to GDP ratio) — drew attention. Reporting in December 2025 noted the Buffett indicator near ~225%, a level historically associated with elevated valuation risk (as noted in widespread market commentary during December 2025).

Multiple expansion vs earnings lift

Scenario analysis: an index level can increase because (a) EPS rises (the healthier long‑term path), (b) multiples expand (investor sentiment and liquidity), or (c) a mix of both. Analysts often stress earnings‑based models (EPS × multiple) as the primary forecast framework.

Index concentration and equal‑weighted performance

Large tech companies account for an outsized share of market capitalization in capital‑weighted benchmarks. When a few names outperform, they can lift headline returns even if most stocks lag. This concentration increases sensitivity: if the top names turn down, headline indices can fall quickly.
Equal‑weighted indices provide a counterpoint: they treat each constituent equally and therefore better reflect breadth. Fidelity and Morgan Stanley commentary in late‑2025 emphasized monitoring equal‑weighted vs cap‑weighted divergence as a signal of sustainability. If equal‑weighted returns begin to catch up, it implies a healthier, broader rally; widening divergence suggests increasing fragility.

Market‑structure takeaway

The structure of the index matters materially to the “will stocks continue to rise” question. A continuation driven by broad earnings growth is more durable than continuation driven by multiple expansion concentrated in a few names.

Macro indicators and market signals to watch

Investors and strategists track a set of leading indicators and market signals that tend to precede major regime shifts. Changes in these indicators can materially change the outlook for whether stocks continue to rise.

Key indicators

Inflation trends (CPI, PCE)

Inflation readings and the core measures (e.g., U.S. core PCE) are primary inputs to Fed policy. Sticky or reaccelerating inflation typically delays rate cuts and increases the likelihood of multiple compression.

Federal Reserve policy and communication

Timing and magnitude of rate cuts (or persistence of higher rates) matter. Market pricing of Fed moves (via fed funds futures) is a direct market signal; strategists publish scenario maps of market paths under different Fed assumptions.

10‑year Treasury yield and yield curve

The 10‑year Treasury yield is a benchmark for discounting future cash flows; rising yields can pressure high‑growth stocks with long duration of earnings. Yield curve inversion or steepening also carries growth and recession signal implications.

Corporate earnings revisions and surprises

Aggregate upward revisions to earnings estimates are supportive; downward revisions undermine the bull case. Weekly earnings‑revision trends reported by sell‑side strategists are closely watched.

Market breadth and advancing‑declining metrics

Breadth indicators (number of advancing stocks, new highs vs new lows) show whether the rally is broad or narrow. Improving breadth is a constructive signal; weakening breadth suggests concentration risk.

Volatility (VIX and realized volatility)

Sustained low volatility can embolden risk appetite, but sudden spikes in VIX often precede corrections. Volatility term structure and options‑market positioning also provide early warning signs.

Credit spreads and corporate issuance

Widening credit spreads signal rising risk aversion and stress in fixed income markets, which can spill over into equities.

How changes alter the outlook

A combination of falling inflation, a clearer Fed easing path, rising Treasury yields that stabilize at moderate levels, and expanding earnings revisions would materially increase the probability that stocks continue to rise.
Conversely, sticky inflation, delayed or absent Fed easing, rising real yields and deteriorating breadth would increase the risk that the rally stalls or reverses.

Risks and headwinds that could reverse or stall gains

Several credible downside scenarios exist that could answer “will stocks continue to rise” in the negative or produce meaningful volatility.

Sticky or reaccelerating inflation

If inflation proves persistent or reaccelerates due to wage pressures, supply shocks or renewed demand strength, the Fed may keep policy restrictive longer, raising discount rates and pressuring valuations.

Policy and trade shocks

Tariff announcements, sudden regulatory changes affecting major industries (technology, semiconductors), or geopolitical trade disruptions can reduce forward earnings visibility and investor sentiment.

Political and election‑related fiscal uncertainty

Election cycles or abrupt fiscal policy shifts can increase uncertainty. Changes in taxation, healthcare policy, or major regulatory initiatives create scenario risk for affected sectors.

Valuation fatigue and multiple contraction

If investor sentiment shifts and multiples contract (particularly for long‑duration growth stocks), large headline declines can occur even if earnings remain positive.

Narrow leadership and collapsing breadth

A collapse in the performance of the concentrated leaders (e.g., major AI beneficiaries) without offsetting strength in the broader market could remove the primary engine of headline gains.

AI narrative cooling or capex slowing

The AI investment thesis is central to many bullish forecasts. If hyperscaler capital expenditures disappoint, or if hardware supply constraints materially reduce profitable deployment, related earnings projections could be downgraded.

External shocks and systemic risk

Sharp credit events, major bank stress, or unexpected systemic shocks to liquidity could trigger rapid risk‑off moves.

Each of the above risks has been highlighted in published bank notes and media coverage through 2025; strategists typically present scenario probabilities and stress‑test their baseline forecasts for such outcomes.

Wall Street consensus and forecast scenarios

Wall Street houses publish a range of outlooks, reflecting differing macro assumptions. Synthesizing those views gives a scenario spectrum rather than a single forecast answer to “will stocks continue to rise.”

Bullish scenario

Under a bull case — cooler inflation, Fed easing, and continued AI‑driven earnings strength — several major firms presented double‑digit upside targets for the S&P 500 or Nasdaq over 12–24 months in their late‑2025 outlooks. This case depends on EPS growth and some multiple support.

Base/neutral scenario

In more cautious views, strategists assume modest GDP growth, steady but slowing inflation, and limited Fed easing. That scenario often produces mid‑single‑digit returns over the next 12 months driven largely by earnings rather than multiple expansion.

Bearish scenario

A downside path incorporates sticky inflation and delayed rate cuts, earnings downgrades and multiple contraction; that scenario yields flat to negative returns and higher probability of a correction.

Why forecasts differ

The primary drivers of divergence are macro assumptions (growth and Fed path), the extent of AI‑related earnings upside, and how much investors price in multiple expansion. Banks explicitly link index forecasts to these inputs in published outlooks (e.g., JPMorgan, Morgan Stanley, UBS, Charles Schwab notes published in late 2025).

As of December 30, 2025, many strategist surveys and roundups in outlets such as CNBC and CBS summarized this range — from bullish double‑digit cases (conditional on strong earnings) to cautious, mid‑single‑digit expectations if macro momentum cools.

Technical factors and the possibility of corrections

Technical analysis and historical behavior of markets provide additional lenses on whether stocks will continue to rise.

Momentum and seasonal patterns

Momentum indicators (moving averages, relative strength) have favored the bull trend through most of 2024–2025, but momentum can fade ahead of corrections.
Seasonality: markets have historically shown mixed seasonal tendencies; while the calendar can influence short‑term flows, seasonality alone is not a reliable long‑term predictor.

Support / resistance and market internals

Major index support levels (e.g., 50‑ and 200‑day moving averages) and previous price highs serve as technical benchmarks. Markets can correct 5–15% even inside long‑term uptrends — corrections are historically common during prolonged advances.

Correction probabilities

Historical data show that extended bull markets still experience periodic corrections. Corrections do not necessarily imply the end of a multi‑year bull market, but they can reset valuation extremes and provide opportunities for rebalancing.

Options and positioning

Options market positioning, put/call ratios, and skew can indicate investor hedging behavior. Heavy one‑sided positioning increases the risk of volatility when flows unwind.

Technical takeaway

Technical signals are useful for timing and risk‑management, but they complement — rather than replace — fundamental and macro analysis when answering “will stocks continue to rise.” Corrections can and do occur even if the longer‑term trend remains positive.

Investment implications and strategies

This section summarizes commonly recommended portfolio practices and tactical responses that professional managers and financial educators describe. Content here is descriptive and not personalized investment advice.

Maintain allocation discipline

A common theme in stewarding long‑term portfolios is to maintain strategic allocations aligned to risk tolerance and investment horizon. Dollar‑cost averaging and systematic contributions reduce sensitivity to timing.

Diversify beyond headline mega‑caps

Given the concentration risk in capital‑weighted indexes, some investors and managers emphasize diversification: consider exposure to equal‑weighted strategies, international equities, small‑cap segments, and sectors less correlated with the AI cycle.

Use active management or hedges if concerned about concentration/valuation

Active managers, factor strategies (value, quality), and hedging tools (put options, defensive overlays) are instruments investors can use to manage concentration and downside risk.

Rebalancing and profit‑taking

Rebalancing toward target weights and selectively trimming outsized winners were widely cited as prudent risk‑management steps in late‑2025 commentary, especially given elevated aggregate valuations.

Time horizon alignment

The longer an investor’s horizon, the more capacity they typically have to absorb short‑term corrections in pursuit of compounding returns. Tactical actions should be aligned with investment goals and liquidity needs.

Risk management and liquidity

Maintaining cash reserves and avoiding over‑leverage are common defensive stances if one expects near‑term volatility. Margin exposure can amplify losses in concentrated corrections.

Practical framing (non‑advisory)

These actions are neutral descriptions of strategies investors and advisors commonly discuss in market commentary. Implementation depends on individual circumstances and should involve qualified financial advice where relevant.

Relation to other asset classes (crypto, commodities, bonds)

Equities do not operate in isolation. Cross‑asset relationships influence whether stocks continue to rise.

Cryptocurrency

Risk‑on equity rallies can coincide with strength in crypto assets, although correlation varies over time. As of late 2025, commentary across crypto markets suggested a more selective, fundamentals‑driven environment for digital assets in 2026.
For readers interested in trading or custody solutions, Bitget exchange and Bitget Wallet are platform options referenced for crypto market participation (platform selection should follow personal due diligence and security considerations). Bitget features multi‑asset trading infrastructure and custody options as part of a broader crypto product set.

Commodities and gold

Gold and commodities can act as inflation hedges or safe havens. Rising inflation or geopolitical risk tends to boost gold and some commodity prices, while disinflationary trends can weigh on those assets.

Bonds and Treasuries

Bond yields (and the direction of the 10‑year Treasury) have a direct effect on equity valuations. Rising yields can reduce equity attractiveness, particularly for long‑duration growth stocks, while falling yields can support higher equity multiples.

Multi‑asset perspective

A diversified multi‑asset approach can use fixed income, commodities and alternative exposures to smooth volatility and hedge scenario‑specific risks that may derail equity gains.

How analysts build their “will stocks continue to rise” outlooks

Institutional forecast methodologies are broadly similar in structure and differ in assumptions and weighting.

Common methods

Earnings‑based models

Analysts typically model index EPS over the forecast horizon and apply a forward multiple to derive price targets. The two levers are EPS trajectory and the multiple (P/E or other valuation metric).

Macro scenario analysis

Firms create macro scenarios (baseline, upside, downside) with mapped probabilities — GDP growth rates, inflation paths, Fed policy timelines — and stress test stock valuations under each.

Risk‑factor stress tests

Analysts run stress tests on key risk factors (interest rates, credit spreads, corporate margins) to estimate downside risk and sensitivity of valuations to adverse shocks.

Consensus surveys and quant aggregation

Many institutions aggregate consensus forecasts for earnings, economic indicators and strategists’ price targets to produce a range of expectations.

Why results differ

Divergent macro assumptions (especially Fed timing and inflation) and differing views on AI‑led earnings growth explain much of the variance in forecasts. Analysts also weight technical and positioning indicators differently when forming conviction.

Frequently asked questions

Q: Should I sell to lock gains?

A: Decisions to realize gains depend on individual goals, tax circumstances and risk tolerance. Market commentary in late 2025 suggested some investors were taking partial profits or rebalancing to reduce concentration risk; others maintained long‑term allocations. Consider seeking personalized advice for tax and portfolio implications.

Q: Are tech/AI stocks still buyable?

A: Tech and AI‑exposed companies remain key drivers of headline returns, but they also carry concentration and valuation risk. Institutional notes emphasize evaluating fundamentals (revenue growth, margins, cash flow) and position sizing relative to risk tolerance.

Q: How much do Fed cuts matter?

A: Fed cuts affect discount rates and risk appetite; earlier or larger cuts tend to support multiples and risk assets. However, cuts are typically linked to growth and inflation outcomes — the market reaction depends on how cuts align with economic health.

Q: What indicators should I monitor weekly/monthly?

A: Weekly: market breadth, VIX, major earnings surprises, and Fed communication. Monthly: CPI/PCE inflation releases, payrolls, and 10‑year Treasury yields. Major strategist updates also appear monthly to quarterly.

Q: Is a broad market correction likely soon?

A: Corrections are common even in bull markets. Historical patterns show periodic 5–15% corrections do not necessarily end multi‑year bulls. The probability of a correction depends on the interplay of inflation, Fed policy, earnings momentum and positioning.

Closing guidance and next steps

If your purpose is to follow whether stocks will continue to rise, track the measurable indicators outlined above: inflation (CPI/PCE), Fed guidance and pricing, the 10‑year Treasury yield, earnings revision trends, and market breadth. Regularly review portfolio concentration and consider diversification and rebalancing as part of risk management. For crypto exposure or custody, Bitget exchange and Bitget Wallet are platform options referenced in market commentary for trading and self‑custody infrastructure; platform choice should follow your own security checks and due diligence.

Further exploration: consult the cited institution outlooks and company filings referenced in the Further reading section to match forecast assumptions to your own time horizon and risk profile.

As a reminder, this article is a neutral synthesis of market commentary and does not provide personalized investment advice.

As of December 30, 2025, this entry reflects published market commentary and strategist notes from the institutions and media outlets named above. Data points such as market capitalizations and index returns are drawn from those reports and company filings in late 2025.

The content above has been sourced from the internet and generated using AI. For high-quality content, please visit Bitget Academy.