Investors are looking forward to the last months of the year. According to experts, there is much to suggest that the year-end rally will gain momentum in 2025.
• Experts see chances for a year-end rally in 2025
• However, risks on the stock markets remain
• Important signals for investors at a glance
According to experts, there are many indications that the year-end rally could actually gain momentum this year. The major indices have increased significantly in the past few weeks. The S&P 500, for example, grew by 5.28 percent in the last three months. There has been an increase of 13.90 percent since the beginning of the year (as of closing prices on October 22, 2025). But how sustainable is this strength and what suggests that the upward trend will continue until the end of the year?
Tailwind from strong quarterly figures and tech stocks
The third quarter season has so far boosted the markets. Wall Street’s biggest banks – including JPMorgan Chase, Goldman Sachs and Morgan Stanley – beat analysts’ earnings expectations and reported solid near-term outlooks. According to the US financial portal Barron’s, the five largest institutions together achieved more than 33 billion US dollars in trading revenue in the third quarter, around 5 billion more than in the previous year.
The technology sector also contributes significantly to the mood. Early indicators from industry giants such as Taiwan Semiconductor and ASML point to continued high demand in the field of artificial intelligence. AI demand “continues to be stronger than we thought three months ago,” Taiwan Semiconductor CEO CC Wei said on the company’s Q3 earnings call. This dynamic could also drive the tech market in the final quarter, especially if upcoming numbers from Amazon, Microsoft, Apple and Alphabet meet expectations.
Support from the US Federal Reserve: Interest rate policy in view
According to experts, another driver for the stock markets is monetary policy. The Federal Reserve is signaling a turnaround after years of tight interest rate measures: lower interest rates in the coming months and a possible end to the reduction of its $6.6 trillion balance sheet. This creates liquidity and could act as additional fuel for the markets.
At the same time, expectations are increasing that falling financing costs could ease the burden on companies in the fourth quarter and boost investments. According to market observers, this would be a classic breeding ground for a year-end rally.
Risks remain – especially in the case of trade disputes and market concentration
Despite the positive signals, there are signs of slowdown. According to market observers, the markets still depend heavily on a few heavyweights. According to Adam Turnquist, chief technology strategist at LPL Financial, shares of NVIDIA, Apple, Tesla, Google and Broadcom have driven the majority of the S&P 500 rally over the past three and a half months. Aside from these giants, the market breadth is declining, which could be a warning signal for a possible correction.
There are also political risks. The ongoing uncertainty about US trade policy under President Donald Trump and a looming government shutdown in Washington could unsettle the markets in the short term.
Chances of a year-end rally on the stock markets – but no guarantee
Despite some headwinds, the signs are currently pointing to a continuation of the upward trend. Historically, the fourth quarter is usually positive in strong stock market years. “Bulls markets are like a cruise ship – once they’re moving, they’re hard to slow down and very hard to reverse,” said Ryan Detrick, chief market strategist at Carson Group, in a post on the company’s website.
Statistically speaking, the fourth quarter was also positive in 20 of 22 years with an annual performance of at least 10 percent, Detrick explained, according to Barron’s. According to experts, the chances of a year-end rally in 2025 are good – even if investors should navigate between euphoria and caution.
Bettina Schneider / editorial team finanzen.net
This text is for informational purposes only and does not constitute an investment recommendation. finanzen.net GmbH excludes any claims for recourse.
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