CFRA’s Sam Stovall Affirms Fundamentals Support 2025 Year-End Stock Advances

On December 24, 2025, CFRA Chief Investment Strategist Sam Stovall appeared on CNBC’s “The Exchange” to discuss year-end market performance, stating that fundamentals confirm the recent stock price advance [3]. From November 24 to December 24, 2025, major U.S. indices posted significant gains: S&P 500 (+4.52%), NASDAQ Composite (+5.04%), and Dow Jones Industrial Average (+5.13%) [0]. These advances coincide with Stovall’s November 2025 forecast of double-digit earnings per share (EPS) growth for the S&P 500 (10.9% in 2025, 13.4% in 2026, 14.2% in 2027) [1], supported by stronger-than-expected U.S. Q3 2025 GDP growth (4.3% annualized, above forecasts) [4]. The rally also broadened beyond mega-cap tech stocks, a late-2025 development that strengthened its fundamental underpinnings [2]. Notably, gains occurred during thin holiday trading volumes, which may have amplified price moves but did not overshadow underlying fundamental drivers.

1. Economic-Fundamental-Market Alignment
   : The 4.3% Q3 2025 GDP growth [4] provides a macroeconomic foundation for robust EPS growth forecasts [1], directly correlating with recent stock price advances [0]. This tripartite link reinforces Stovall’s assertion of fundamental support.
2. Broadening Rally Credibility
   : The expansion of the rally beyond mega-cap tech [2] indicates fundamental strength is not concentrated in a narrow segment, reducing sector-specific risk and enhancing the rally’s sustainability.
3. Holiday Trading Context
   : While thin volumes may have exaggerated short-term moves, the persistence of gains alongside strong fundamental metrics [0][1][4] suggests the rally is not merely a liquidity-driven anomaly.

• Liquidity Risk: Thin holiday trading volumes increase potential for exaggerated price swings, introducing short-term volatility [2].
• AI Profitability Uncertainty: Investor skepticism remains regarding when AI investments will translate into durable profit growth, which could pressure tech stocks [2].
• Fed Policy Ambiguity: Uncertainty about the pace of 2026 interest rate cuts may disrupt market expectations [2].
• Delayed Economic Data: A backlog of delayed reports (GDP, CPI, jobs data) could alter market sentiment once released [2].

• Sustained EPS growth forecasts [1] and solid economic fundamentals [4] present potential for continued market strength into 2026, especially if AI investments deliver measurable profits.

This analysis synthesizes CFRA’s Sam Stovall’s year-end commentary [3] with market data and economic indicators. Major U.S. indices gained 4.52–5.13% Nov 24–Dec 24, 2025 [0], supported by double-digit S&P 500 EPS growth forecasts [1] and 4.3% Q3 2025 GDP growth [4]. The rally broadened beyond mega-cap tech [2], enhancing its fundamental credibility, though risks from thin liquidity, AI profitability, and Fed policy remain. Decision-makers should consider both the positive fundamental backdrop and aforementioned risk factors when evaluating market conditions.