The broad market S&P 500 Index isn't far from all-time highs... On January 23, it hit a record closing high of 6,118.71. Right now, the index is only down about 1% from that level. And it has gained roughly 3% so far in 2025.
We're in a Time of 'Headline Risk'
By Marc Chaikin, founder, Chaikin Analytics
The broad market S&P 500 Index isn't far from all-time highs...
On January 23, it hit a record closing high of 6,118.71. Right now, the index is only down about 1% from that level. And it has gained roughly 3% so far in 2025.
But over the past month, some unsettling developments have caused big volatility in stocks...
One was the turmoil surrounding Chinese artificial-intelligence ("AI") startup DeepSeek. The company announced breakthrough speed and cost advances in AI.
Another development was a series of tariff announcements from President Donald Trump (with more happening this week)...
And another was the arrival of Elon Musk and his Department of Government Efficiency ("DOGE") cost cutters inside the federal government.
Looking ahead, there are still plenty of uncertainties regarding the economic impact of President Trump's tariff initiatives and their effect on inflation rates.
The next few months will see a tug-of-war between a strong economy and the shifting sands of U.S. monetary, fiscal, and tariff policies. That will challenge the resolve of this bull market.
Put simply, we're in a time of what I call "headline risk." And I expect to see continued big swings in the market as a result.
But as I'll explain, I'm still "bullish" on stocks. In fact, my target for the year sees another 12% gain in the S&P 500 from here...
President Donald Trump has now signed more executive orders in his first 10 days than any recent president has in their first 100 days. He's making waves in immigration policy... international trade... and public health, while most investors are frozen wondering what might happen next. That's why Professor Joel Litman – who has consulted with both the Pentagon and the FBI – is stepping forward to lay out what he thinks is about to happen... and exactly which types of stocks to buy and sell immediately.
The people of Texas are fed up. Like a lot of us, they're sick of being overtaxed and overregulated. And they're tired of the U.S. dollar being devalued and inflated by politicians in Washington – so, the Lone Star state has taken matters into its own hands... and has begun embracing a new currency. It's not gold or silver, and it has nothing to do with Texas' huge oil reserves. But this new currency is already creating enormous wealth for anyone who understands it. Here's exactly what's happening.
Despite all this uncertainty, the market has performed well.
Stocks have rallied from their January lows. And it happened without the mega-cap stocks leading the way... with the exception of Meta Platforms (META). The stock has jumped an incredible 20% since mid-January.
Strong fourth-quarter earnings reports have fueled a good part of the rally. And the Federal Reserve Bank of Atlanta's GDPNow forecast of 2.9% first-quarter GDP growth has also helped.
But recent data from the Institute for Supply Management ("ISM") is the real story...
The ISM Manufacturing Index rose to 50.9 in January. That's the first expansion in the factory sector after 26 months of contraction.
Even more "bullish" for stock prices is the ISM New Orders Index spiking above 55. This is the highest level in almost three years.
An expanding manufacturing sector is "bullish" across the board for stocks.
Historically, this has been a great sign for the S&P 500. According to SentimenTrader.com, looking out six and 12 months, the index has posted median gains of 6% and 12%, respectively... with 80% positive results.
And it's particularly "bullish" for mid- and small-cap stocks.
Keep in mind that corporate buybacks totaled more than $900 billion in 2024. And they're expected to exceed $1 trillion this year. That's a big demand tailwind for stocks.
Putting it all together, I remain "bullish" on the stock market...
I'm looking for the S&P 500 to approach 6,800 in 2025. That's roughly 12% above current levels.
The extreme volatility over the past two months has created numerous "buy the dip" opportunities... but only if you ignore the headlines.
Good investing,
Marc Chaikin
Market View
Major Indexes and Notable Sectors
# Hld: Bullish Neutral Bearish
Dow 30
+0.3%
9
14
7
S&P 500
+0.08%
85
275
138
Nasdaq
-0.24%
30
51
19
Small Caps
-0.58%
450
983
473
Bonds
-0.64%
— According to the Chaikin Power Bar, Small Cap stocks and Large Cap stocks remain somewhat Bearish. Major indexes are mixed.
* * * *
Sector Tracker
Sector movement over the last 5 days
Staples
+2.53%
Information Technology
+2.32%
Utilities
+2.29%
Real Estate
+2.2%
Energy
+1.33%
Industrials
+1.16%
Financial
+0.78%
Materials
+0.13%
Communication
-0.14%
Health Care
-0.69%
Discretionary
-3.46%
* * * *
Industry Focus
Innovative Technology Services
52
40
4
Over the past 6 months, the Innovative Technology subsector (XITK) has outperformed the S&P 500 by +25.45%. Its Power Bar ratio, which measures future potential, is Very Strong, with more Bullish than Bearish stocks. It is currently ranked #4 of 21 subsectors and has moved down 1 slot over the past week.
Top Stocks
ACMR
ACM Research, Inc.
ANET
Arista Networks Inc
AMPL
Amplitude, Inc.
* * * *
Top Movers
Gainers
DD
+6.85%
ECL
+6.22%
INTC
+6.07%
SPGI
+4.89%
KO
+4.73%
Losers
FIS
-11.49%
SMCI
-9.47%
TSLA
-6.34%
WBA
-6.12%
MAR
-5.4%
* * * *
Earnings Report
Earnings Surprises
Z Zillow Group, Inc.
Q3
$0.35
Beat by $0.06
TPG TPG Inc.
Q4
$0.62
Beat by $0.10
WELL Welltower Inc.
Q4
$0.34
Missed by $-0.07
DD DuPont de Nemours, Inc.
Q4
$1.13
Beat by $0.15
CARR Carrier Global Corporation
Q4
$0.54
Beat by $0.06
* * * *
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