Stock Market Outlook 2025: Is the Bull Market Over or Just Rotating?

As March 2025 unfolds, many investors are asking the million-dollar question: Is the bull market over? Or are we witnessing a deeper shift in leadership beneath the surface?

At Reveille Wealth Management, we believe the answer isn't black and white. The real story is about asset rotation—a move away from overvalued U.S. large-cap stocks and toward underappreciated sectors like emerging markets, international equities, and commodities.

A Choppy Start: What’s Going on With U.S. Stocks?

The stock market outlook for 2025 has been rocky in the U.S.:

●     Dow Jones is down over 5.5% year-to-date.

●     S&P 500 is down more than 5.5%.

●     Nasdaq has fallen over 6%.

●     Russell 2000 (small caps) is off by 5.75%.

Notably, both growth and value stocks are under pressure—though growth stocks are leading the decline, down over 8% this year.

Growth vs. Value Stocks 2025: A Shifting Dynamic

For much of the past decade, growth stocks—especially in the tech sector—dominated performance. But 2025 is showing signs of a reversal.

This year, value stocks have held up slightly better, and sectors like energy, financials, and industrials are beginning to outperform their growth-heavy counterparts. The growth vs. value stocks 2025 conversation is becoming increasingly relevant, especially as interest rates stabilize and investors refocus on fundamentals.

Rebalancing Small Cap vs. Large Cap Stocks

Another key rotation underway: small cap vs. large cap stocks.

Large-cap stocks, particularly the “Magnificent Seven,” have been a mainstay in investor portfolios. However, they now appear overvalued and overowned. Meanwhile, small caps are trading at steep discounts, making them a potential source of alpha in a diversifying market.

The Quiet Outperformers: Commodities and International Markets

While the headlines focus on U.S. volatility, international equities and commodities are quietly posting strong gains:

• International stocks are up over 8% YTD.

• Emerging markets have returned around 3%.

• Commodities vs. S&P 500: Commodities are leading with nearly 6% returns this year, while the S&P is in the red.

This highlights the importance of diversification in investing—a principle often overlooked during U.S. bull runs.

Trump Tariffs Are Not the Sole Cause of the Pullback

Media narratives point to Trump tariffs’ market impact, but while these headlines might cause short-term jitters, they’re likely not the primary driver.

Instead, the pullback appears tied to:

• Extreme U.S. valuations

• Heavy capital concentration in large-cap growth

• Early signals of global capital rotation

  
  

These factors suggest a broader rebalancing, not an economic meltdown.

Asset Rotation Strategy: A New Market Cycle?

If we are entering a new phase of the cycle, investors should revisit their asset rotation strategy. Here's why:

• The S&P 500 is losing relative strength.

• Emerging markets investment strategies are beginning to pay off.

• Commodities are climbing as a hedge against inflation and uncertainty.

  
  

This could mark a longer-term trend—where leadership rotates away from the U.S. and into more diversified, global opportunities.

Key Takeaways: What This Means for You

1. Reevaluate Concentration Risk: If you're heavily weighted in U.S. large-cap growth stocks, now may be the time to diversify.

2. Global Is the New Growth: International markets and commodities are showing resilience—and deserve a seat at the table.

3. Be Forward-Looking: Successful investing in 2025 and beyond may require a pivot in strategy—not panic.

   
   

How to Navigate the Stock Market in 2025

The stock market outlook for 2025 may look different than the last decade. Rather than asking simply, “Is the bull market over?” the better question may be, “Where is the new bull market beginning?”

At Reveille Wealth Management, we're here to help you adjust your sails as the winds of change pick up. Contact us at our Georgia or Florida offices to review your asset allocation and position your portfolio for what’s next.

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Disclosures

Material prepared partially by Arm Communicators, LLC, and independent third-party.

Any opinions are those of Reveille Wealth Management and not necessarily those of Raymond James. Expressions of opinions are as of this date and are subject to change without notice. Raymond James and its advisors do no offer tax or legal advice. You should discuss any tax or legal matters with the appropriate professional. Investing involves risk and you may incur a profit or loss regardless of strategy selected, including diversification and asset allocation. Prior to making an investment decision, please consult with your financial advisor about your individual situation.

The S&P 500 is an unmanaged index of 500 widely held stocks that is generally considered representative of the U.S. stock market.

The NASDAQ composite is an unmanaged index of securities traded on the NASDAQ system.

The Dow Jones Industrial Average (DJIA), commonly known as “The Dow,” is an index representing 30 stocks of companies maintained and reviewed by the editors of the Wall Street Journal.

The Russell 2000 Index measures the performance of the 2000 smallest companies in the Russell 3000 Index, which represent approximately 8% of the total market capitalization of the Russell 3000 Index.