Stocks have seen wild swings in the first half of 2025, with shares falling sharply after the Trump administration announced new tariffs in April before recovering to reach new highs in June. The S&P 500 has risen about 6 percent this year as of early July. Analysts surveyed in Bankrate’s Second-Quarter Market Mavens Survey expect the market to continue its upward march over the next year, forecasting a 7 percent increase in the S&P 500 by the end of June 2026.
The survey’s respondents expect the S&P 500 to climb from 6,173 at the end of the survey period to 6,611 by the end of the second quarter next year. It’s the 19th straight survey in which the market experts have predicted gains over the coming four quarters. However, the pros now favor U.S. stocks over international equities, as well as growth stocks over value stocks for the coming year.
“With volatility, tariffs-induced declines and a new record high achieved, this wasn’t your garden variety quarter or start to the year,” says Mark Hamrick, Bankrate’s senior economic analyst. “It wouldn’t be prudent to suggest that the coming months or year will be wildly different. We just don’t know. But the solid returns seen so far this year and over the past few years underscore the benefits of taking a long-term approach to investing.”
Here are the highlights from Bankrate’s quarterly Market Mavens survey.
Forecasts and analysis:
This article is one in a series discussing the results of Bankrate’s Second-Quarter 2025 Market Mavens Survey:
Stocks to continue reaching new milestones over next year, pros say
Stocks recovered to reach new highs in June after falling on concerns higher tariffs would impact the economic outlook. Now, the investment experts surveyed expect the march higher to continue. The average estimate for the end of the second quarter 2026 is 6,611, a gain of 7.1 percent from 6,173 at the end of the survey period on June 27, 2025. That’s down from the 13.4 percent increase predicted in the first-quarter Bankrate survey.
Market pros expect normal returns over next five years
Equity valuations are high, but many analysts expect to see solid earnings growth. Here are their estimates for stock market returns over the next five years, compared to the S&P 500’s average long-term return of about 10 percent per year.
- Fifty percent said returns over the next five years are expected to be about the same as their historical average.
- Thirty-three percent of respondents said returns would be above the historical average.
- Seventeen percent said returns would be lower than the long-term average.
Those responses showed a jump in those expecting normal returns over the next five years, compared with the first-quarter survey. Here are the results of the previous four surveys for comparison.
While there are concerns over high starting valuations, most analysts expect strong earnings growth to drive stocks higher, ultimately coming in around their historical averages.
“Given full valuations, earnings will be the biggest driver of returns and should come in close to historical averages,” says Sameer Samana, head of global equities and real assets at Wells Fargo Investment Institute.
Dec Mullarkey, managing director at SLC Management, says he expects the adoption of artificial intelligence to boost productivity, which should “sustain earnings and deliver strong equity returns.”
U.S. stocks should outperform international stocks, experts say
The analysts surveyed now expect U.S. stocks to outperform international stocks over the next year.
- Fifty percent of respondents favor U.S. stocks over the next year.
- Thirty-three percent picked international stocks to outperform.
- Seventeen percent said returns between the two would be about the same.
The responses represent a shift back toward U.S. stocks, after the first-quarter survey showed a slight preference for international stocks.
“Assuming deficit concerns don’t drive up interest rates, we would expect the best returns over the next 12 months to be found in the U.S. market,” says Patrick J. O’Hare, chief market analyst at Briefing.com. “The improved tax rate environment coupled with better trade deal terms and the prospect of the Fed put being exercised, either because of tame inflation or weakening growth, should work to the advantage of U.S. equities.”
SLC Management’s Mullarkey also prefers U.S. stocks over the next year. “U.S. companies still have significantly stronger earnings potential than European and Asian peers,” he said. “The U.S. early leadership in AI investment should continue to build value as adoption accelerates.”
Not everyone is convinced of the supremacy of U.S. stocks, however.
“We are beginning to see signs of increased spending from foreign countries on things like defense and infrastructure,” says Chris Fasciano, chief market strategist at Commonwealth Financial Network. “This will lead to improving fundamentals and better earnings growth. Investors will pay attention to improving fundamentals and attractive valuations.”
Growth stocks over value stocks for the next 12 months, pros say
Growth stocks are back in favor over value stocks based on the expected returns over the next year, according to the most recent survey.
- Fifty-eight percent of respondents favor growth stocks over value stocks.
- Twenty-five percent prefer value stocks over growth stocks.
- Seventeen percent think returns between the two will be about the same.
Growth stocks are once again the top choice in the latest survey after value stocks took the top spot in the first quarter. Analysts see investors rewarding companies that can grow earnings, though some see opportunities in value stocks.
“With tariff and geopolitical risks receding, investor optimism has picked up as they see growth improving,” Mullarkey says. “Most equity analysts expect S&P 500 companies to pass tariffs through to consumers or alternatively optimize operations to preserve margins.”
“Wall Street rewards growth,” says Kim Forrest, chief investment officer at Bokeh Capital Partners. “’Value’ is just a company that started to grow from a period of underperformance.”
However, some analysts think you’ll get more for your money with value stocks.
“Growth has been the preferred class of stocks, which has stretched valuations,” according to Briefing.com’s O’Hare. “So, if talking in terms of ‘prospects for greatest returns over the next 12 months,’ we would argue that prospect falls in favor of value stocks. That would be especially true if the U.S. economy performs better than expected, and the Fed is cutting rates because inflation is tame, as opposed to cutting rates because growth is weak due to rising unemployment.”
Trump policies add to risks investors face, according to pros
We asked the market analysts how things like tariffs, the “One Big Beautiful Bill”, trade wars and monetary policy uncertainty impact the way investors should be thinking about risks and opportunities in the market.
“We view policy as an amplifier or a dampener of the underlying macroeconomic [and] fundamental outlook,” Wells Fargo’s Samana said. “Thus far policy has been a dampener, but the second half of this year should see it becoming an amplifier of what we see as a solid underlying macroeconomic [and] fundamental outlook.”
“New government policies have a large risk of damaging the economy and stock market,” said Kenneth Tower, president of Quantitative Analysis Service. “Surprisingly, to me, the new policies have not been a major drag and I suspect they will remain neutral over the next year.”
“Political issues add to volatility,” says Michael Farr, chief market strategist at Hightower Advisors. “Monetary policy MUST be apolitical. The spiral of ever-increasing debt cannot continue.”
Editorial Disclaimer: All investors are advised to conduct their own independent research into investment strategies before making an investment decision. In addition, investors are advised that past investment product performance is no guarantee of future price appreciation.
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