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Investing.com -- As the S&P 500 turns positive for the year, BMO analysts see more gains ahead, arguing that markets are moving to "show me" from a "scare me" story as fundamentals rather than fear return to the driving seat.
The S&P 500 turned positive for the year earlier this week after closing above 5,827.
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BMO’s chief investment strategist Brian Belski points to the “ferocity of the price recovery in US stocks, especially coinciding with the perception – yes, perception – that the exogenous news flow regarding tariffs and the ‘potential’ coast becoming much ‘clearer’ has generated,” as clear evidence that the 25-year secular bull market in US stocks is “alive and well.”
After a period of sharp volatility and skepticism, BMO is standing by its year-end S&P 500 price target of 6,100 and 2025 earnings per share target of $250, maintaining a bullish stance that has often been doubted by the market.
“Our bullish stance on US stocks has been belittled, doubted and ridiculed so far in 2025 like no other time in our career – including Covid,” Belski wrote, emphasizing that process and discipline, not “herd” sentiment, continue to drive their outlook.
BMO acknowledges that it recently revised its targets lower from an initial 6,700 and $275, citing the speed and severity of the recent selloff, but notes that the recent rebound adds “credence that our year-end bull case is achievable.”
Looking ahead, BMO stresses that any future forecast revisions will be driven by traditional fundamental metrics, not by “chasing the herd.” Among the signposts for market and fundamental stability:
“Earnings stabilize alongside a return of company guidance; less reactive price activity following perceived good or bad news out of Washington DC – including, but not limited to tariffs and other political strife; [and] broadly distributed equity performance persists and maybe even strengthens.”
BMO’s recommended sector positioning remains overweight in information technology, financials, and consumer discretionary, with a preference for process-driven strategies over chasing headlines.
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S&P 500’s recovery has legs, as market shifts to ’show me’ from ’scare me’: BMO