Asset Management
06/09/2025 Market Strategy
June 09, 2025
Gimme Some Lovin’
Continued Uncertainty on Tariff Policy and Budget Process Remains a Negative Overhang for Equity Markets
Key Takeaways
- The S&P 500 closed at 6000 on Friday, exceeding for a second time our 5950 price target for the index by year-end. Given the uncertainty over trade and budget policies, we’re going to be patient before considering a revision higher.
- Economic data last week showed resilience, with the nonfarm payrolls posting a solid gain and the ISM surveys a little soft but not showing signs of worrisome weakening.
- With all but two of the firms in the S&P 500 index having reported, profits in Q1 were up 12.5% from a year earlier on 4.6% revenue growth.
- Seven sectors reported positive earnings growth, with four at double-digits, while four sectors showed negative growth, two of which were at double-digits.
- This week brings the first indications of inflationary pressures in May with the CPI and PPI releases.
Stocks ended last week on an upbeat note, as better than expected May nonfarm payroll gains (notwithstanding revisions to two prior monthly numbers) along with recognition of better than expected results in the S&P 500 Q1 earnings season improved market sentiment to the continued consternation of the bears and market skeptics.
The S&P 500 closed last Friday at 6,000.4 just slightly less than 1% above our year-end target of 5950 which we had moved to after the market pullback that began in the first quarter and bottomed early in the second quarter.
When it comes to adjusting our S&P 500 price target, no rush for now with the first half of the year still in progress.
S&P 500 Closes Above our Year-End Price Target
With our 5950 target now having been surpassed on two recent market closes we are being asked by colleagues and clients if we are considering adjusting our year-end target price for the S&P 500.
With tariff level uncertainty still remaining high and with the debate in Washington over the budget still in process and yet unresolved, we are certainly considering it. But not without first practicing patience and rightsizing our expectations in consideration of the near-term issues at hand that could invite volatility in the day to day activity in the markets.
In other words, when it comes to adjusting our year-end price target for the S&P 500 no rush for now with the first half of the year still in progress.
We remain bullish on equities and favor the asset class over other asset classes at this time. We continue to maintain a view that favors cyclicals over defensive sectors, diversification across sectors, market capitalization and style. Our favorite sectors remain: Information technology, communication services, consumer discretionary, industrials, and financials.
While fundamentals stateside in our view should remain supportive of equities from here to the end of the year, it’s not without expectations that volatility could cap further gains for the broad market from Friday’s close in a range of 5%-6% should tariff concerns and fiscal policy remain where they lie now without at least some resolutions to show genuine progress. Bears and market skeptics will likely remain on alert for any catalysts that could provide them opportunity to take profits from the recent rallies without FOMO (fear of missing out) amidst what we believe may well be a secular (long-term) bull market driven by technological innovation.
In our view it remains a “workout” market for now where progress not perfection remains key to finding “babies that get tossed out with the bath water” in market pullbacks and “time in the market rather than timing the market” remains an important adage to be considered by investors with intermediate- and long-term goals.
In the week ahead, progress on the aforementioned fronts will be key to the direction the market takes along with economic data, corporate, and geopolitical news flow.
Name:
John Stoltzfus
Title:Chief Investment Strategist, Oppenheimer Asset Management Inc.
John is one of the most popular faces around Oppenheimer: our clients have come to rely on his market recaps for timely analysis and a confident viewpoint on the road forward. He frequently lends his expertise to CNBC, Bloomberg, Fox Business, and other notable networks.
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