Commentary
First Quarter 2025 Quarterly Market Update
Market summary: US economy helped push up stock prices and bond yields.
Key Takeaways
- Markets: The S&P 500 index posted a total return of 25% for 2024, with modest gains in Q4. However, other asset categories, including non-US stocks and fixed income assets, struggled during the fourth quarter.
- Economy: The US economy remained strong, supported by positive real wage growth, a solid job market, and high levels of household wealth. Despite some softening, overall employment conditions remained tight.
- Investments: Large-cap US stocks, particularly in the technology and communications sectors, continued to outperform, with the largest 7 companies driving significant earnings growth.
- Valuations: Valuations for US stocks are near historically high levels, with the trailing one-year price-to-earnings (PE) ratio well above its long-term average. In contrast, non-US developed-market valuations remain below their historical average.
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First quarter 2025 quarterly market update
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