2024 was an eventful year on the stock market, with the S&P 500 index reaching 57 record highs last year alone. This index has also been climbing for over 13 months now without any drops greater than 10%, which according to BofA Global Research is the longest such streak in three years.
One of the most impactful events on the US stock market last year was the re-election of Donald Trump. Analysts expect to see more shockwaves rippling through the market as a result of this, especially from the date he takes office on January 20th and begins to enact his new policies.
Trump bump
In the five days after Trump won the election, the S&P 500 went up nearly 5%, giving the index its best week in over a year. Although the S&P 500 fell at the tail end of the year, it still managed to close out 2024 with an annual gain of 23.3%. The Nasdaq 100 has increased even more, up 24.9% over 2024.
Will the stock markets continue being so active this year, and will share prices keep rising?
Investor confidence has driven these significant increases in share prices so far. Investors who backed Trump hope that the president will loosen regulations, lower corporate taxes, and introduce other traditionally-Republican policies that aim to promote growth, as well as encouraging domestic production. Hence, it’s no surprise that the Bank of America’s global fund manager survey for December revealed that allocation to US stocks has reached a record high at net 36% overweight, its biggest jump since September 2023.
Mergers and acquisitions
Some analysts think that Donald Trump will create a more pro-business environment that encourages mergers and acquisitions. Transactions are expected to be completed faster than under Joe Biden - and while he was president there were also a higher number of antitrust cases brought to court, aiming to prevent mergers he deemed anticompetitive. Analysts at Goldman Sachs predict a M&A ‘supercycle’ this year as dealmaking spikes under Trump.
Goldman Sachs has highlighted several stocks that the investment bank’s analysts believe could be targets for acquisition. Shares in companies that announce they are being acquired often initially get a boost in price, before the stock price of the newly combined company also rises. One of these stocks is Altimmune, a biopharmaceutical company focused on developing treatments for obesity and liver diseases. Analysts believe the price might increase by 202.36% in the next year, going from $7.21 to $21.80.
This screenshot is taken from our Nemo Money investment app, where you can view up-to-date info about how stocks are performing, as well as comparing this to historical data about previous performance.
Possibility of a market crash?
Anthony Scaramucci, the financier and former Trump administration White House communications director, has predicted that Trump’s second presidency will lead to a stock market crash. His concerns are that policies like higher trade tariffs against China, Europe, Canada and Mexico, along with mass deportations, could drive consumer prices up, ultimately sending the US into a recession that could lead to a stock market crash. However, Scaramucci has also shared in recent interviews some optimistic thoughts based on the people Trump has appointed to his cabinet - he has suggested that some of these more “moderate Republicans” may act as an influence on Trump, limiting how far he might go with these policies.
Bitcoin and crypto
Cryptocurrency adjacent stocks might continue to experience major growth in 2025 due to support from Donald Trump.
Out of the gates, some cryptos are showing impressive momentum as they pick up from where they left off in 2024. Already, within just the first two calendar days of the new year, the likes of Ripple, Chainlink, Avalanche, and Cardano have posted double-digit gains of 13-15%.
Trump is an outspoken supporter of cryptocurrency, especially Bitcoin, meaning that stocks related to the industry might succeed in 2025. Back in July he spoke at the Bitcoin 2024 conference and said he wanted to establish a “strategic national bitcoin stockpile”. In Trump’s speech he also pledged to fire Securities and Exchange Commission Chair Gary Gensler who is critical of cryptocurrency - Gensler has since said that he will be stepping down in January. Trump has chosen Paul Atkins, the co-chair of cryptocurrency lobbying group Token Alliance, as the new chair of the SEC. Bitcoin has exploded since Trump’s presidential victory was announced, with its price first breaching the $100K mark on December 5, but it faltered back below that psychologically-important price level in the latter half of December 2024.
One stock that has been highlighted by analysts as potentially benefiting from Trump’s crypto-friendly policies is MicroStrategy, which is widely considered to be a proxy for Bitcoin on the stock market due to the company’s significant holdings in the cryptocurrency. This stock’s value has increased 322.98% over the past year, but analysts think it might still increase further. Rated a ‘strong buy’, MicroStrategy is predicted to increase in price by 68.32% from $289.62 to $487.50 in the next 12 months.
Another crypto adjacent stock that analysts predict might do well in the year to come is CleanSpark, which they think might rise in price from $9.21 to $26.40 in the next 12 months, which would be an increase of 186.64%. This Bitcoin mining company owns and operates data centers across the US including sites in Wyoming, Tennessee, Mississippi, and Georgia.
Conclusion
President Trump’s policies under his second administration starting January 20th 2025 remains the primary focus of US stock markets, and indeed the world, this year. Ongoing developments in key, fast-moving industries also harbor the potential for some major shifts on the stock market that investors might stand to profit from.
Using our Nemo Money investment app, you can track the historical performance of the companies that interest you the most, as well as seeing what their stock price is right now and what analysts predict it might rise or fall to in the future. Why not download it today and start investing for your future? We also have a registration bonus offer for new users right now - we’ll match 50% of whatever you top up your new account with, up to a maximum bonus of $50.
All stock data is correct at the time of writing in January 2025.
