Big investors strike a cautious tone on markets for 2025 with Trump policies, inflation posing risks
The backdrop should be reassuring for many investors: A lively bull market, pro-business policies promised by the Trump administration and a Federal Reserve close to pulling off a soft landing.
The backdrop should be reassuring for many investors: A lively bull market, pro-business policies promised by the Trump administration and a Federal Reserve close to pulling off a soft landing. However, Wall Street’s biggest names aren’t sounding so bullish for the year ahead.
Convening at an alternative investments conference in Miami this week, hedge-fund titans and industry pros collectively struck a cautious tone about elevated market valuations and potentially negative impacts from President Donald Trump’s protectionist policies.
Point72′s Steve Cohen said he believes tariffs and an immigration crackdown will stoke inflationary pressures and hinder consumer spending. The family office head and Mets owner therefore expects the broader market to get bumpy, particularly in the second half of the year.
“I don’t think that’s a great backdrop in 2025,” Cohen said at the iConnections Global Alts conference dubbed Hedge Fund Week. “I would expect the markets to top over the next couple months, if it hasn’t already topped already, and I would expect the second half to be a little tougher.”
The S&P 500 just scored a second consecutive annual gain above 20%, and the two-year gain of 53% is the best since the nearly 66% rally in 1997 and 1998. The equity benchmark is up 3% year to date, but investors just got a taste of violent volatility this week. An artificial intelligence competitor out of China caused a massive sell-off in Nvidia and other megacap tech names earlier this week.
Rating: 5