Donald Trump effect? Global economic growth, S&P 500 predicted in 2025

Uncertainties around the US policies may slow global economic growth modestly in 2025, according to major brokerages. They expect US President-elect Donald Trump’s proposed tariffs to fuel volatility across global markets, spurring inflationary pressures and, in turn, limiting the scope for major central banks to ease monetary policy. World economies and equity markets have had a robust year, with global growth expected to average 3.1 per cent this year, a Reuters poll published in October showed, according to a Reuters report.

The benchmark S&P 500 was trading above 6,000 points, and has jumped more than 4 per cent since November 4. The Russell 2000 index has surged more than 8% in the same period, Reuters reported.

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Brokerage Barclays raised its full-year 2025 forecast for the S&P 500 to 6,600 points from 6,500, as per Reuters report.

Investors have recently swung between expectation of a pause versus a further cut in interest rates at the Federal Reserve’s December meeting. The CME Group’s FedWatch Tool shows a near 56 per cent probability the central bank will deliver another 25 basis point cut.

The Personal Consumption Expenditure report, the central bank’s preferred inflation gauge, will be on investors’ radar this Thanksgiving 2024 week.

FAQs

Q1. How is S&P 500 performing?
A1. The benchmark S&P 500 was trading above 6,000 points.
Q2. How is Russell 2000 index performing?
A2. The Russell 2000 index has surged more than 8 per cent in the same period.