Investors are increasingly concerned about whether the S&P 500 index will be able to sustain its growth, especially given the stronger performance of the European and Chinese markets. According to Bloomberg, BofA strategist Michael Hartnett believes that the U.S. stock market may face challenges, while international markets continue to show more confident growth rates.
In an interview with Bloomberg TV, the expert pointed out that the longer it takes for the S&P 500 to reach new record highs, the more doubts arise among market participants. In his view, the attractiveness of U.S. stocks is declining in 2025, making investments in other countries’ securities look more promising. A key reason for this is the potential correction in the “Magnificent Seven”—the largest U.S. tech companies that have enjoyed a significant rally since 2023.
Hartnett highlights the vulnerability of the IT sector due to potential declines in demand for technology as well as high costs associated with artificial intelligence development. If the current growth momentum slows, major tech stocks could come under pressure.
Another risk factor remains the overvaluation of the U.S. market. Many investors have already begun diversifying their portfolios in favor of European and Asian assets, expecting more stable growth. According to data, the S&P 500 has gained less than 2% since the beginning of the year, while the MSCI All-Country World Index (excluding the U.S.) has surged by 7%. Particularly disappointing is the performance of the “Magnificent Seven”, which has declined by 3.3% over the same period.
Analysts also point to challenges in monetary policy. The U.S. Federal Reserve has been reluctant to lower interest rates, which limits liquidity inflows and increases costs for businesses. Meanwhile, Europe and China are adopting a more accommodative monetary policy, fueling stock market growth.
Experts do not rule out the possibility that market dynamics could shift in the coming months, particularly if U.S. regulators take measures to support the economy. However, for now, investors are choosing to expand their investments in international markets rather than focusing solely on American stocks.
As a result, while the S&P 500 remains in a zone of uncertainty, markets in other countries continue to gain momentum, pushing investors to seek new growth opportunities beyond the U.S.
