Donald Trump’s return to the White House is also likely to affect the stock markets, say experts. Nevertheless, they expect a good year on the markets overall.
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- Experts expect a solid stock market year overall in 2025.
- The first half of the year is likely to be dominated by Donald Trump.
- In general, most strategists have a certain preference for US equities.
In January 2025, Donald Trump moves into the White House for the second time. This will bring unpredictability back to the markets and is likely to lead to increased volatility for the time being. Overall, however, it could be another good year for equities.
However, investors should be prepared for regional differences – just like in the stock market year now drawing to a close. For example, the hype surrounding artificial intelligence (AI) and Trump’s clear re-election have boosted the US stock markets. The German DAX is also no longer impressed by the country’s economic woes.
The situation is different on the Swiss stock market, where the SMI benchmark index is currently showing comparatively meagre gains of around 2.9% for 2024. The rather weak performance is mainly due to its defensive orientation. In particular, the share price losses of more than a quarter at heavyweight Nestlé have left their mark.
Defensive as good protection
Meanwhile, this orientation could also offer a certain degree of protection in the coming year, according to experts. Various strategists expect the first half of 2025 in particular to be characterized by uncertainty and volatility. The reasons for this are not least Trump’s return to the White House.
“There is no doubt that President Trump’s victory will influence the coming stock market year,” say the market strategists at insurer Zurich. “The tough rhetoric has already sent shockwaves.”
Inflation an issue again
For example, international trade is likely to be disrupted initially if the Trump administration introduces new tariffs on US imports. Higher tariffs will lead to higher prices for US consumers. The planned stricter immigration policy, in turn, is likely to tighten the labor market. “Both will further fuel inflation. This is the downside of the policy, which is why Donald Trump has to weigh up very carefully how far he can go,” says Raiffeisen CIO Matthias Geissbühler.
This policy may also have an impact on the future interest rate path of the US Federal Reserve, which was one of the last to cut interest rates this year. As a result, interest rates in the US could remain restrictive, which would also slow down US economic growth from the interest rate side.
Weaker economic growth in the US coupled with the protectionist trade policy is likely to put pressure on growth in the eurozone and China. “There is likely to be an economic slowdown in the US and the EU, but we are not currently expecting a recession,” predicts Thomas Stucki, investment expert at St. Galler Kantonalbank. “The US economy will prove to be resilient.”
Most strategists are also not expecting a significant downturn in China. The question remains as to what extent Beijing will succeed in supporting the economy with a comprehensive support program.
Negative factors for the Swiss economy
All of this will not leave the Swiss economy unscathed. Germany’s economic problems in particular represent a considerable burden factor, coupled with the political uncertainty ahead of the upcoming elections. However, according to strategists, the new government has a certain amount of leeway to help the economy back on its feet.
From the second half of the year, most strategists expect a slight improvement overall. At Julius Baer, Christian Gattiker justifies this with the fact that Trump stands for deregulation, among other things. “The motto for the coming year will be ‘success is a matter of negotiation'”. Accordingly, the investment expert assumes that the markets will see many “deals”, i.e. takeovers and mergers, from next year. “A lot that has built up over the past four years will rush onto the market.”
Market experts agree that there is no way around shares in this environment. “Technology and semiconductor-related sectors are likely to continue to show the most exciting movements,” says SGKB. For the strategists, a good counterbalance to this is the local pharmaceutical sector, which should continue to grow solidly. After all, experts like Geissbühler believe that the SMI will reach 13,000 points by the end of 2025 – an increase of around 10 percent.
In general, however, most strategists have a certain preference for US equities. They are still seen as the main winners of a Trump administration.
Gold and Bitcoin
In addition to equities, Gattiker von Bär also advises investing in tangible assets such as gold and silver. Gold already had a strong inflow in 2024. As long as investors are unsettled, this is likely to remain the case.
Investors should also keep an eye on the cryptocurrency Bitcoin. “Many market participants are happy to lock Bitcoin in the broom closet,” says Gattiker. “But the cryptocurrency is here to stay and will probably continue to rise.”
US President Trump also plays an important role here. Should he actually approve cryptocurrencies such as Bitcoin as a strategic reserve currency, they are likely to go through the roof.