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Capital Markets Outlook: Trends & Predictions for 2025

2025 is shaping up to be another unique year ahead when it comes to assessing the capital markets outlook. Below we’ve outlined the key factors to keep an eye on, along with some emerging trends and industries to watch.

Interested in 2025 market forecasts and trends? Join us at NASDAQ for the Capital Conference and hear executives in high-growth sectors speak to what’s happening in the markets in real time.

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8 Capital Market Trends Shaping 2025 at a Glance

1. US GDP Growth

When it comes to looking at the GDP, many market forecasts predict that it will grow in 2025, but at a slower pace than the prior few years. Consumer spending cooled in 2024 due to the Federal Reserve’s action to combat inflation and slower wage growth than in the years coming out of the pandemic.

Other factors like geopolitics and upcoming changes with a new administration will impact US exports and investments, but time will show what those results are. Ultimately, if the GDP does slow a bit from prior years, the outlook is that there will still be positive growth again. (So long as there are no large, unpredictable upsets.)

2. Inflation Shifts / Interest Rates

In 2024, we saw the Federal Reserve’s action start to cool down the spikes in inflation that came post-Covid. As a result, they’ve cut down interest rates by 75 basis points. (And several other global central banks have decreased rates as well.)

While the Federal Reserve hasn’t confirmed upcoming cuts, many predict a few more steady ones in 2025. (That is so long as inflation continues to slow toward the 2% target without any unforeseen disruptions. )

If inflation is closer to that goal in 2025, it’ll potentially lead to more willingness to borrow and spend again compared to the year prior, both for businesses and consumers. It’ll also have an impact on future earnings, boosting stock and real estate values. Some economists are skeptical though that a 2% rate will be achieved in 2025.

3. Unemployment Rates

Disregarding the brief spike of unemployment that rose during COVID-19, the rate dropped back down close to pre-pandemic levels and then started slowly rising again starting in 2022. Some of the recent activity with interest rates has affected this. As the rates rose, economic activity slowed, which led to more job losses.

However, the job market has continued to outperform in the past few years even when experts predicted it’d cool down. Unemployment hasn’t climbed as high as some predicted it would, even in 2024. 

Some trends that have possibly led to a slower rise than predicted could be the number of professionals retiring and the severity of rising worker shortages across states. Either way, the fact it’s been slow to climb should give investors confidence we’re not heading towards a weakening economy.

4. Geopolitics

While geopolitics aren’t easy to predict the outcome of, here are several that will continue to affect the capital markets outlook for 2025:

• Tensions with China, particularly around trade, manufacturing, and technology
• The Russian and Ukrainian war and its impact on the US and European economies
• The Israeli and Palestinian conflict leading to oil price volatility and other geopolitical issues
• New emerging markets abroad like Brazil, Vietnam, India, Indonesia, and Turkey

It’ll be key to pay close attention and ensure the company you’re partnering with has a solid strategic risk management plan in place to handle geopolitical shifts.

5. Potential Tax Cuts

The Tax Cuts and Job Act of 2017 is set to expire in 2025. Some capital market expectations include a prediction that the Republican Congress will look to extend them and perhaps even work toward tax cuts beyond those measures. (Although right now it’s all speculation.)

If cuts are extended and more come in the next few years, this could lead to higher corporate profits and more investment in capital goods, research and development, and job creation. 

6. The Possibility of More Tariffs

There’s been talk within the US government of leveraging more tariffs as a means to encourage American manufacturing again. If the government passes more, this could lead to higher prices of goods or retaliation from other countries with tariffs on US-made products.

An increase in tariffs could also create uncertainty and lead to some market volatility, depending on what they’re placed on. Companies affected by them may see their earnings and stock prices shift, along with lowered investor confidence.

7. The AI Race Heating Up Investments

It’s no secret — AI is the driving force behind tech right now. It has a huge influence on capital market expectations. And the major tech companies will spend more on AI in 2025 to build their infrastructure.

Looking at the stocks of major companies developing AI-driven technology, there’s been a noticeable increase in value. There are a lot of groups competing to have the next big breakthrough. And there are also a lot of investors hoping to get in early before that happens to maximize their returns. 

AI has lots of potential. But it’s key for investors to vet their options thoroughly, as it can be a riskier choice if you’re opting to partner with startups. We recommend looking for businesses adhering to early AI compliance guidelines and adopting a safe, ethical approach.

8. Clean, Renewable, and Traditional Energy Shifts

In recent years, there have been a lot more incentives and investments in wind, solar, and hydropower, to name a few. There’s also still a lot of activity happening with renewable and traditional energy resources.

With emerging technology and developments that require massive amounts of power, like AI data centers, companies are also starting to make deals to ensure they have ample resources. This is where paying attention to emerging trends in capital markets and their ties to energy will pay off for investors in the upcoming years.

High Growth Industries & Sectors To Watch in 2025

At Centri, we provide accounting and advisory expertise on demand to businesses across many industries. However, we see noticeable activity happening among these and expect to see continued rapid growth among them.

Reconsidering Alternative Investments vs Traditional Assets

In 2025, we also expect to continue seeing a trend toward alternative investments. Adding them can create more diversification in your portfolio and while some of them carry more risk, they do offer the potential for a higher return.

Some alternative investment strategies that remain popular include:

The key to seeing returns from alternative investments is to get to know who you’re working with, vet that relationship, and make sure you’re comfortable with the risks and rewards.

The Final Takeaway on 2025’s Capital Markets Outlook

Overall, the consensus from many around the capital markets outlook is that there will continue to be varying degrees of growth and positive returns for investors, but not at the high rates seen in the prior decade and years of strong recovery directly after the pandemic.

Looking to hear about activity in the capital markets directly from the experts? Attend the Centri Capital Conference and meet business leaders in disruptive technology, life sciences, healthcare, and other leading industries.

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