Financial analysts predict tough times ahead for Wall Street as rising bond yields and a strong dollar continue to dampen investor sentiment.
Impact of Bond Yields on the Market
According to Morgan Stanley strategists, inflation fears are pushing the 10-year Treasury yield past 4.5%, and the 30-year yield has reached its highest point since late 2023. Michael Wilson, a Morgan Stanley strategist, highlights the negative impact on indices, noting challenges for the already weakened market.
Challenges in the Stock Market
In December, the S&P 500 rally fizzled out amid economic uncertainty and a hawkish Federal Reserve stance. Tech stocks, in particular, were hit hard. Wilson believes that lower rates, a weaker dollar, and clearer trade policies are needed for market recovery. The S&P 500 is expected to reach 6,500 points, with major growth likely by late 2025.
Bitcoin's Growth Amid Market Uncertainty
Bitcoin continues to perform well amid market turmoil. Analysts expect its price to double, especially with potential regulatory changes following Donald Trump's election victory. Despite challenges, the cryptocurrency ended 2024 with over 120% gains.
The overall outlook for the stock market remains uncertain, but experts point to potential recovery opportunities with lower interest rates and clearer policies.
