Why the market has room to run in the second half of the year

The Street

Jay Woods, Chief Global Strategist for Freedom Capital Markets, shares why he thinks the market could be on the upswing in the second half of 2025.

Transcript

00:00You're bullish on the overall market in the second half of the year.

00:03Why is now the time for the market to continue to run?

00:06I am, and I don't like it when I get this giddy,

00:10but we just withstood one of the biggest sell-offs and biggest times of uncertainty.

00:14The market climbed this wall of worry.

00:16Well, we not only climbed the wall, we're standing on top looking down.

00:19Now we have our sights going higher.

00:22So to me, this is all the ammunition you have fed about to lower rates.

00:28The tariffs, which were still, you know, we don't know where these things are going to end up.

00:33The market doesn't care.

00:35So as someone has followed and studied market price and market activity

00:38and then been a part of the market for 33 years down here,

00:41when you go in this environment where it's the end of the world,

00:45sentiment got to historical lows.

00:46I'm not talking like, you know, lows for a year or two.

00:50No, historical lows, worse than 1987, worse than the, you know,

00:54we had to go back to the Great Depression to see sentiment levels that reached as low as they did

00:59just in April when we had Liberation Day.

01:02So that was the washout.

01:05Now we've made that back, and now we start to build from here.

01:08And what are people going to do?

01:09They're going to play, you know, catch-up.

01:11We've seen that the U.S., not the best performing market, not even close.

01:15So there are a lot of institutions who have been kind of on the sidelines.

01:18It's the retail investors, people that watch the street.

01:20They're the ones that have been buying this dip and are doing really well.

01:24The institutions are going to have to put money to work, and what do they do?

01:27They chase performance.

01:28Yes, you know, we're back in NVIDIA.

01:30We're back in Meta.

01:30We're back in Microsoft.

01:31Yes, we're in the large-cap banks.

01:33And so when you see new highs, to me, they always get new highs until, you know, the last one.

01:39And you never know when that's going to be.

01:41But when you look at a general move over a secular time period,

01:45and we're in a secular bull market, I still think we have a good 12 to 18 months to run.

01:51Once we get all this uncertainty away, I think we're poised to have a good second year

01:57in the Trump administration and a good 2026.

02:00But I like how we're set up going to end this year, too.

02:03Tell us some names that are set up well for the second half of the year.

02:07What names have momentum right now?

02:09Well, financials, I look at the place we're sitting right now, ICE, the New York Stock Exchange, the NASDAQ.

02:14The exchanges continue to do well.

02:16Trading is at all-time highs.

02:18There are more vehicles to trade.

02:20So to me, you want to be in the exchanges.

02:23Visa, MasterCard, they got hit a little bit with some of the crypto news.

02:27I still think those are two great names to buy, put away over the long term.

02:32And then I mentioned the big financials and J.P. Morgan.

02:34But then you want to pivot?

02:36Let's talk technology stocks.

02:38I mean, no one talks about IBM or Cisco.

02:40Cisco, Cisco is now a cyber play.

02:42They acquired Splunk.

02:43That deal went through in 2024.

02:46So they've got an accretive year of revenue under their belt from that acquisition.

02:51That was a huge cyber play.

02:52That is starting to pay dividends.

02:54So you look at what they've started to do.

02:57They've broadened their horizons.

02:59It's still not at its highs from the dot-com era.

03:02Now, I lived through the dot-com era.

03:03I remember Cisco as one of the preeminent stocks in the world.

03:06Well, you know, it didn't catch up with Apple or Microsoft.

03:10It's left for dead.

03:11But guess what?

03:12It's coming back to life.

03:13So I love the Ciscos, the IBMs.

03:15But when you talk leadership and why I'm bullish on this market overall, you've got to look at what drives the market.

03:20It's the large cap names that the S&P 500, those magnificent names, they're breaking out the new highs.

03:27NVIDIA has done nothing for 12 months.

03:29It finally broke out above 150.

03:31I've been pounding the table.

03:32Once this gets above 150, it's going to run.

03:34I still think this stock could be at 200 by the end of the year.

03:37That's a nice return.

03:38Meta, about to make new highs.

03:40Microsoft, the first of the Max 7 to make new highs.

03:42This is why I'm so bullish, when the leadership is right.

03:46So in bull markets, you want to see technology lead.

03:48You want to see financials.

03:50The one-lagger consumer discretionary.

03:52Let's blame Tesla and Elon Musk for that.

03:54He caused some havoc.

03:55He hasn't gotten back to near new highs.

03:58It's the second biggest stock in that index.

04:00But I love Amazon.

04:01Amazon has room to run.

04:03Andy Jassy is doing magnificent things.

04:06They're going to go AI, cut a few jobs.

04:09But I think Amazon is poised to also be a great leader in the second half of the year.

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