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Chicago, IL – July 2, 2025– Today, Zacks Investment Ideas feature highlights Nasdaq 100 Index ETF QQQ, CoreWeave CRWV, Circle Group CRCL and Morgan Stanley MS.
With the first half of the year in the books, bulls have regained control of Wall Street. Below are six reasons that bulls will remain in control into the summer:
Stock market seasonality is the practical study of how specific times of year often lead to repeatable patterns that traders and investors can use to gain an edge in the stock market. Seasonality was popularized Yale Hirsch, who published groundbreaking research on seasonality and cycles and founded the wildly popular "Stock Trader's Almanac." Hirsch not only examined the calendar; he took his research a step further and illustrated the often-repeated and predictable patterns associated with the four-year presidential cycle.
While seasonality may sound like voodoo to new investors, the results speak for themselves. Over the past few years, election cycle seasonality has been dead on. For instance, election cycle seasonality has warned investors that the first quarter of the presidential cycle (Q1 2025) tends to be weak. Sure enough, the S&P 500 declined by 4.3%, and that's after rallying off the lows. The good news is that seasonality tends to shift after Q1 as we have witnessed. July, during the first year of the presidential cycle, is the strongest month on average.
The Nasdaq 100 Index ETF printed fresh all-time highs last week. However, those headlines were not on many investors' bingo cards during the tariff market mayhem of early 2025. Despite the face-ripping market rally off the lows, investors remain unconvinced that the bull market will continue.
The AAII Sentiment Survey gauges the opinions of individual investors on where the market is heading in the next six months. Historically, the average number of bulls outweighs the average number of bears. However, the most recent AAII Sentiment Survey shows that just 35.1% of respondents are bullish while more than 40% are bearish – a bullish sign for contrarian investors.
For the past three years, the number of IPOs has been stagnant. Often, new companies have decided to avoid going public due to regulations and the macroeconomic environment, or have waited too long to go public, resulting in lower stock prices. However, in 2025, the IPO market has performed a 180-degree turn, and several companies have had successful debuts, including AI juggernaut CoreWeave and stablecoin king Circle Group.
The 2025 IPO revival is a good omen for Wall Street, as IPOs are the lifeblood of the market, offering new and innovative growth opportunities for investors and signaling a risk-on appetite on Wall Street.
Fed-driven liquidity is one of the most critical catalysts that savvy investors track. A 'dovish' Fed (low-interest rate policy) environment can drive stocks higher, while a 'hawkish' Fed (high-interest rate policy) can bottle up stocks. Fed Chair Jerome Powell has received considerable criticism from both sides of the political aisle for maintaining interest rates at elevated levels recently. However, Morgan Stanley predicts that this will change soon, forecasting seven rate cuts in 2026.
Historically, Wall Street hates uncertainty. The two biggest uncertainties currently are geopolitical tensions and the ongoing tariff negotiations. On the geopolitical front, President Trump was able to successfully negotiate a ceasefire between Israel and Iran in the Middle East, lowering the temperature on escalation concerns. Meanwhile, Trump trade advisor Kevin Hassett stated in an interview last weekend that several trade deals are nearly finalized, and there are around 20 that are in the final innings.
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performancefor information about the performance numbers displayed in this press release.
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This article originally published on Zacks Investment Research (zacks.com).
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