BlackRock sees artificial intelligence as a driving force for the US stock markets in 2025. At the same time, however, the asset manager warns that the growing US national debt could weigh on the prospects for 2025.
• AI boom is likely to further boost the stock market
• US stocks are likely to benefit more
• Gold and Bitcoin as alternatives to government bonds
AI as a driver for the markets
BlackRock predicts that technological innovations in AI will bring greater benefits to US markets than their European counterparts. Meanwhile, private markets are expected to play a central role as they increasingly contribute to financing the infrastructure needed for AI. “We remain risk-on… and remain overweight U.S. stocks as the AI theme expands,” said a report from the BlackRock Investment Institute that summarizes the views of the firm’s top investment strategists, according to Reuters.
Interest rates remain high, inflation stubborn
The US economy could cool slightly in 2025, but BlackRock does not expect significant easing monetary policy. The central bank will probably not be able to reduce key interest rates below 4 percent because inflation remains above its target value. At the same time, factors such as geopolitical tensions and massive investments in infrastructure could put additional pressure on the bond market.
“We are watching interest rate adjustment dynamics very closely, we are also watching very closely tariff announcements, which may lead to higher inflation expectations and market volatility,” Reuters quoted Wei Li, chief investment strategist at BlackRock, as saying. This dynamic is expected to further push up long-term government bond yields as investors are likely to demand higher compensation for holding such securities.
Gold and Bitcoin as attractive alternatives to government bonds
BlackRock favors US corporate bonds over Treasuries and government bonds from other developed countries such as the UK, where interest rate cuts appear more likely. However, the asset manager sees a rise in bond yields as a risk to its positive assessment: “We are underweight in long-term US Treasuries both tactically and strategically and see any rise in long-term bond yields as a risk to our optimistic assessment,” the institute tells Reuters again.
At the same time, BlackRock sees gold and Bitcoin as attractive alternatives to classic government bonds, especially as a hedge against possible setbacks on the stock markets. When it comes to stocks, the company focuses on sectors such as technology and healthcare.
Editorial team finanzen.net
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