WHERE TO INVEST NOW

The crystal ball has gone dark on Wall Street. Flexibility and diversification will be key in the second half of 2025.

- BY ANNE KATES SMITH

IF we had to pick a theme for our mid-year outlook this year, it would be “wait and see.” Wall Street’s crystal ball has rarely been murkier.

Will the Trump administration’s tariffs reignite inflation? Will the U.S. economy slide into a recession? Has the U.S. stock market put a spring swoon definitively behind it? The answer to all of the above: We'll have to wait and see.

That’s always the answer when it comes to forecasting, of course, especially the direction of the market. But the weight of the evidence usually tips the scales one way or another, toward offense or defense—only now, the evidence is still up in the air and shifting almost daily. “These are interesting times,” says Jody Jonsson, a portfolio manager and vice chair of fund company Capital Group with 38 years of financial industry experience. “What’s happening right now is different than anything I’ve seen in my entire career, a fundamental restructuring of the world order—politically, economically and militarily.”

We don’t know how all of 2025’s known unknowns will resolve. But it’s certain that uncertainty will reign for a while longer. There are signs that the broad U.S. stock market may have already hit its low, and it closed out the month of April on a hot streak. Yet plenty of skepticism remains about a durable bullish breakout. The market is likely to stay choppy for much of the rest of the year, whipsawed by policy news from the White House and by economic data that will either confirm or contradict the recent abysmal readings on investor sentiment and confidence.