Chris Harvey, the head of Wells Fargo Securities’ equity strategy, believes that U.S. stocks are poised to experience a major rally during the second half 2025.
Harvey is confident that despite persistent tensions in trade and uncertainty over policy, much of the risk associated with tariffs has already been priced into the markets – or even exaggerated – while the economic fundamentals are still resilient.
Wells Fargo believes the S&P will surpass 7,000 by next year.
Harvey, speaking with CNBC, reiterated that he has set a bold target for the S&P 500 at 7,070 by year’s end, which is higher than any Wall Street. It implies a gain of almost 20% over current levels.
Wells Fargo’s analyst views recent volatility in the market as part of an overall positive trend.
We’re progressing on tariffs and trade. In the same interview, he said that “we will continue to make improvements.” He added, “We’ll occasionally take a backward step, but the Trump administration seems intent on moving the ball forward.”
Harvey’s optimistic outlook is largely due to the Federal Reserve’s interest rate policy.
He cited recent remarks by Fed Governor Christopher Waller who said that the Fed would be justified in lowering interest rates if tariffs remained at 10% or less to counteract the growth drag.
Wells Fargo’s equity strategist believes that tariffs will end around 10-12 percent. “We’re becoming more confident in that belief.”
The US could reduce its deficit by reducing tariff revenue
Harvey believes that modest tariffs within the range mentioned above would distribute costs fairly evenly between importers, companies, and consumers with minimal economic disruption.
The revenue could also help reduce the deficit. He said that increased revenue could be a stabilizing factor.
Wells Fargo’s strategist thinks that trade agreements with India, Japan and the European Union, as well as China, may be of even greater strategic significance.
China is being disintermediated. Our allies are being told: If you want to profit from this change, then play along with us.
In recent earnings calls, he pointed out that companies have been citing their efforts to diversify manufacturing and relocate supply chains to China in order to lessen exposure.
Chris Harvey says that this indicates the US Strategy is gaining momentum and can support wider economic resilience.
What can offset Wells Fargo’s bullish outlook on US stock?
Harvey also warned that the greatest risk to Harvey’s forecast is uncertainty. In the event that there’s not enough clarity about trade by midsummer, this could start to affect corporate confidence and hiring.
People may begin to reduce their staff if we are still here in July or June and saying “We’re not certain.” Then things may start to go wrong.
The strategist is still bullish, however, that the market will shift to growth-oriented themes by July such as tax reductions and fiscal stimuli.
Investors may start to see past the temporary softness of the economy and look forward more positively at 2026 if significant progress in trade is made, such as with India or Japan.
This post US Stocks Could Still Rally 20% In The Second Half Of 2025: Find Out More may change as new information becomes available.
