Stock Market Predictions: What Experts Say About the Next Quarter

US Market Set for a Potential Rebound : Experts anticipate a modest rebound following a weak start to the year. Despite a 0.3% contraction in Q1 GDP, rising inflation may lift nominal growth to 5%. Mike Wilson of Morgan Stanley highlights that quality US large-cap stocks are positioned to outperform, driven by strong earnings and defensive fundamentals.

International Equities May Lose Momentum : While international stocks outperformed US markets in early 2025, analysts expect a reversal in the coming quarter. Morgan Stanley predicts that US equities will regain strength due to relative earnings stability and resilience in tech-led sectors, reducing the appeal of international diversification.

AI and Tech Stocks Remain Bullish Bets : Artificial intelligence continues to dominate investor interest. Companies like Palantir and NVIDIA lead the charge with strong growth and earnings. Experts suggest that AI-driven productivity gains could spark a broader market rally similar to the tech boom of the late 1990s, even amid economic uncertainty.

Tariff Announcements Stir Market Volatility : Markets reacted sharply to new tariff announcements, including a 100% duty on foreign media. Wall Street's recent rally paused as fears of escalating trade tensions resurfaced. Analysts warn that policy surprises could add short-term volatility and potentially disrupt recovery trajectories in upcoming months.

Interest Rate Cuts Now Uncertain : The Federal Reserve paused further rate cuts in Q1 2025, as inflation remained sticky. Initial expectations of aggressive easing have been trimmed. Experts now foresee only one or two additional rate cuts this year, which could influence investor sentiment and market momentum in long-term.

Inflation Expectations Revised Upward : The Fed has revised its core PCE forecast to 2.8% for 2025, up from earlier projections. Rising service costs and sticky inflation in sectors like housing and healthcare could pressure margins. Experts suggest cautious stock selection, focusing on inflation-resilient sectors like utilities and consumer staples.

Expert Sentiment Turns Cautiously Bearish : According to Barron's Big Money Poll, only 26% of professional investors are optimistic about the next 12 months, the lowest since 1997. While some see long-term value in dividend stocks and blue-chip tech, many remain wary due to macro risks, earnings uncertainty, and geopolitical tensions.

Join our WhatsApp Channel to get the latest news, exclusives and videos on WhatsApp