What investors can expect from stocks and the economy in 2025
There are reasons for investors to be hopeful about 2025, with slowing interest rates and moderating oil prices. But trouble may be brewing in bond markets

This will be “a year of living dangerously”, says Katie Martin in the Financial Times. After two successive years of 20%-plus gains, the Wall Street boom could be living on “borrowed time”. Incoming US president Donald Trump might deliver US tax cuts, deregulation and a Ukraine peace deal, allowing stocks to “party like it’s 1996”, says Henry Neville of the Man hedge fund. Alternatively, his tariff policies could cause an inflationary surge that unleashes a 2022-style stock and bond rout. “Fireworks lie ahead in either case.”
How returning inflation echoes a 1970s economy
An inflationary comeback is an “underappreciated risk for 2025”, says Tom Stevenson in The Telegraph. There are “echoes of the late 1960s and early 1970s”, with central bankers crying victory over price rises before the job is done.
What else lies ahead? The “dominance of US tech giants” looks likely to end, if for no other reason than that Trump’s “America first” programme should help smaller US companies instead. Finally, it’s unreasonable to hope for another year of double-digit stock gains. Such a “melt-up” would see us enter “full bubble mode”, with things certain to “end badly”.
MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
The real trouble may be coming in bond markets, where government overspending could cause an investor revolt, says The Economist. The US government’s ten-year borrowing costs have already spiked from 3.6% in September to 4.6% today. A “big fear” is that Trump’s immigration and tariff plans will fuel inflation, forcing the Federal Reserve to keep interest rates elevated.
Are there reasons for optimism in 2025?
Warnings of a “spiral into a global trade war” in 2025 are “overdone”, argues Neil Shearing of Capital Economics. There is little global appetite for a tit-for-tat protectionist battle with America, while floating exchange rates will help absorb some of the tariff strain.
While a “low probability/high impact” event such as a conflict over Taiwan can never be ruled out, 2024 was a reminder that geopolitical risks can also be exaggerated. The last 12 months brought a major Middle East conflict and “the closure of one of the world’s most important shipping routes”. Yet oil prices fell and trade continued to roll. For all the challenges that the world economy faces, 2025 might prove to be “a year of muddling through”.
There are reasons to be hopeful about 2025, agrees Mehreen Khan in The Times. For one thing, interest rates are now “steadily falling” worldwide, providing a supportive backdrop for asset prices. Lower borrowing costs should take the edge off concerns about large public debt piles. Moderating oil prices are another tailwind.
Even the long-suffering FTSE isn’t looking so bad, say Khan and Tom Howard in the same paper. British blue chips rallied 5.8% in 2024, their fourth consecutive annual rise and the best run since the 2000s. It would have been even better were it not for a sterling rally that ate into the value of the FTSE’s predominantly international earnings – the pound was “the second-best performing major currency in the world after the US dollar” in 2024.
This article was first published in MoneyWeek's magazine. Enjoy exclusive early access to news, opinion and analysis from our team of financial experts with a MoneyWeek subscription.
Get the latest financial news, insights and expert analysis from our award-winning MoneyWeek team, to help you understand what really matters when it comes to your finances.
Alex is an investment writer who has been contributing to MoneyWeek since 2015. He has been the magazine’s markets editor since 2019.
Alex has a passion for demystifying the often arcane world of finance for a general readership. While financial media tends to focus compulsively on the latest trend, the best opportunities can lie forgotten elsewhere.
He is especially interested in European equities – where his fluent French helps him to cover the continent’s largest bourse – and emerging markets, where his experience living in Beijing, and conversational Chinese, prove useful.
Hailing from Leeds, he studied Philosophy, Politics and Economics at the University of Oxford. He also holds a Master of Public Health from the University of Manchester.
-
Is it time to ride the recovery in emerging markets?
Interview What's the outlook for emerging markets? Gustavo Medeiros, head of research at Ashmore Group, gives his analysis and reviews progress in developing economies
-
Could the Enterprise Investment Scheme cut your tax bill?
The Enterprise Investment Scheme is tax-efficient and potentially lucrative. Taking a chance on the scheme could trim your family’s IHT bill, says David Prosser
-
'Ride the recovery in emerging markets': Gustavo Medeiros of Ashmore Group tells MoneyWeek
Interview What's the outlook for emerging markets? Gustavo Medeiros, head of research at Ashmore Group, gives his analysis and reviews progress in developing economies
-
The City's big bet on green finance fails to pay out
Opinion Insurers and banks are backing away from “green finance”, and there is not much sign of the green boom we were promised. That’s a problem for the City
-
Okta: an undervalued cybersecurity play
Okta provides vital security services and appears cheap considering AI’s growing prominence
-
Should you invest in Pakistan – the Vietnam of South Asia?
Opinion If Pakistan is now serious about reform, it’s time for investors to buy, says Maryam Cockar
-
'Why you must own gold and Bitcoin'
Opinion The world is dedollarising, and gold and Bitcoin are the only alternatives. Buy now, says Dominic Frisby
-
The AI barons call time on the bubble
Opinion OpenAI's Sam Altman and other tech giants are warning that the AI boom is reaching dangerous territory. They may end up as the authors of their own demise
-
How multi-asset trusts can help you deal with volatility
Multi-asset trusts help navigate global uncertainty and provide investors with an added layer of protection through diversification
-
When buying bank stocks, think small for the best value
Bankers love to build bloated global empires, but that rarely rewards their investors, says Bruce Packard