Extreme volatility is behind us: Wall Street urges investors to enjoy a calm summer

After a turbulent start to 2025 with a nearly 30% S&P 500 drop, leading strategists now foresee stabilized markets and moderate economic growth at 1.4%. Experts from Morgan Stanley, Goldman Sachs, and Citi highlight strong earnings and a stable economy, signaling a potential upside surprise this quarter and a summer of subdued volatility.

Sources:

Updated 38m ago

Sources:

Wall Street experts agree that the period of extreme market volatility is over, encouraging investors to enjoy a calm summer ahead.

"The volatility is going to continue. ... But I think the extreme volatility is behind us," said Jeff McClean, CEO of Solidarity Capital.

Analysts point to strong earnings and a stable economy as reasons for optimism. Andrew Slimmon, managing director at Morgan Stanley, said, "I do think the second quarter is going to surprise on the upside yet again," highlighting robust earnings expectations.

Several strategists have maintained bullish year-end targets for the S&P 500, ranging from 6,300 to 6,500, reflecting confidence in market resilience.

Morgan Stanley's chief investment officer Mike Wilson noted in a recent note titled "Don't fight it" that a "moderate slowdown in growth" was likely already priced in earlier this year when the average S&P 500 stock dropped nearly 30%.

Historical context also tempers concerns, with analysts like Sam Stovall of CFRA Research describing recent corrections as largely influenced by trade policy rather than fundamental weakness.

Economic forecasts remain cautiously positive, with consensus projecting the US economy to grow at an annualized pace of 1.4% in 2025 after a dip in early May.

This combination of factors suggests a summer of relative calm for investors, with no major market disruptions expected.

"My recommendation right now is to enjoy the summer," McClean advised, underscoring the current market stability.

Overall, Wall Street's outlook balances ongoing volatility with optimism for steady growth and strong corporate earnings, encouraging investors to remain confident in the months ahead.

Sources:

Wall Street strategists say the extreme market volatility is behind us, urging investors to enjoy a calm summer. Experts cite stable earnings, a moderate economic slowdown priced in, and historical patterns, with S&P 500 year-end targets ranging from 6,300 to 6,500 amid expectations of steady growth in 2025.

The Headline

Wall Street sees calm summer, rising S&P 500 targets

The extreme volatility is behind us. My recommendation right now is to enjoy the summer. There’s not really anything that's going to get us excited about that range being broken substantially to the upside or downside.

Jeff McClean

CEO of Solidarity Capital

I do think the second quarter is going to surprise on the upside yet again, citing strong earnings expectations and a stable economy.

Andrew Slimmon

Managing Director and Senior Portfolio Manager at Morgan Stanley

Key Facts

Solidarity Capital CEO Jeff McClean believes that extreme volatility is behind us and advises investors to enjoy a calm summer without expecting major market swings.
Citi's Scott Chronert raised the S&P 500 year-end target from 5,800 to 6,300, signaling growing confidence in the market outlook.
Morgan Stanley's Andrew Slimmon expects the second quarter to surprise on the upside due to strong earnings and a stable economy.
Consensus projects US economic growth at an annualized 1.4% in 2025 after a low point of 1.35% in early May.

Key Stats at a Glance

S&P 500 year-end target increase

6,300 points

Previous S&P 500 year-end target

5,800 points

US economic growth projection for 2025

1.4%

Recent bottom US economic growth rate

1.35%

Background Context

Trump trade moves, early-year drop, and data trends explained

The month of June tends to be weak for stocks with mild volatility. The current correction is manufactured, largely shaped by President Trump's trade decisions.

Sam Stovall

Chief Investment Strategist at CFRA Research

Key Facts

President Trump's trade decisions contributed to a manufactured market correction with mild volatility in June, according to Sam Stovall of CFRA Research.
The S&P 500 experienced a nearly 30% drop earlier in the year, which Morgan Stanley's Mike Wilson said priced in a moderate slowdown in growth.
Goldman Sachs' equity research team found that during event-driven recessions, soft economic data tends to bottom before hard data, suggesting potential market stabilization.

Key Stats at a Glance

S&P 500 drop earlier in the year

30%

Extreme volatility is behind us: Wall Street urges investors to enjoy a calm summer

Wall Street sees calm summer, rising S&P 500 targets

Trump trade moves, early-year drop, and data trends explained

Article

Source Citations