To The Moon

Bullish Outlook: Why the Nasdaq and S&P 500 May Have More Room to Run

As of July 11, 2025, both the Nasdaq and S&P 500 continue to hit fresh record highs, bolstered by improved trade sentiment, progress on tariff negotiations, and increasingly bullish institutional forecasts. Major players like Goldman Sachs have revised their year-end targets for the S&P 500 upward, now predicting a range of 6000 to 6600. Despite potential short-term volatility and policy-related uncertainty, I maintain a bullish view based on the market’s structural momentum and robust upward trajectory.

Market Drivers: Trade Thaw and Rate Expectations

In Q2 2025 alone, the S&P 500 rose approximately 11%, while the Nasdaq surged nearly 18%. This rally is largely fueled by easing geopolitical tensions (notably U.S.-China and U.K.-U.S. trade talks) and growing expectations that the Federal Reserve may cut rates. Goldman Sachs raised its year-end target for the S&P from 6100 to 6600, while some analysts, such as those at Sanctuary Wealth, even project levels as high as 7000—driven by optimism around AI, blockchain, and other transformative technologies.

Investor sentiment has clearly turned bullish. The latest AAII survey shows 41.4% of individual investors are optimistic about the market, well above historical averages. While concerns about Trump’s proposed tariffs (e.g., 50% on copper goods) linger, the market seems increasingly desensitized and more focused on earnings growth. For instance, S&P 500 earnings are expected to rise 5% in Q2, reinforcing the bull narrative.

Unique Angle: The Synergy Between Trade Relief and Tech Innovation

One overlooked but important dynamic is how progress in trade negotiations is not just removing tariff headwinds—it’s also enabling deeper supply chain realignment and fresh capital flows into emerging markets. According to Goldman Sachs, many large-cap firms are mitigating trade shocks through inventory strategies and logistics optimization.

Meanwhile, tech megacaps, especially in AI, continue to lead. NVIDIA’s valuation recently surpassed $4 trillion, acting as a key engine for index gains. The confluence of trade tailwinds and technology leadership may create a broader, more inclusive bull market—one that transcends sector rotation and pulls in sidelined capital.

Upside Potential: Short- and Long-Term Plays

If the S&P 500 can break through 6600 and sustain the move, a test of the 6700–7000 range is plausible. The Nasdaq also has room to climb beyond its record 20,243. For swing traders, near-term support levels like 6000 on the S&P and 19,500 on the Nasdaq may offer entry points. Long-term investors stand to benefit from capital appreciation, especially under a potential rate-cutting cycle and steady earnings expansion.

A diversified growth-oriented strategy—such as holding tech ETFs like QQQ or select high-beta growth stocks—can provide upside while managing volatility exposure.

Risks to Watch

Despite the bullish backdrop, several risks merit attention. Trump’s latest tariff threats, such as a 50% duty on copper products, could trigger short-term selloffs. Inflation remains sticky in parts of the economy, and Fed officials like Raphael Bostic currently forecast only one 25-basis-point rate cut in 2025.

Moreover, excessive investor enthusiasm could itself become a contrarian signal. Indicators like CNN’s Fear & Greed Index are flashing “Extreme Greed,” and technical overbought readings (e.g., RSI > 70) suggest caution is warranted. Markets rarely move in a straight line.

Final Thoughts

The rally in the Nasdaq and S&P 500 reflects a convergence of factors—trade optimism, technological innovation, and strong institutional support. With 6600 now a base case and 7000 a real possibility, the bull market appears to be entering an acceleration phase. Active investors should lean into this momentum but remain agile, watching for macro surprises and technical reversals.

A balanced strategy—embracing growth while preparing for pullbacks—offers the best path forward in this evolving but opportunity-rich environment.