Recent market analysis suggests promising trends for stocks through the remainder of 2025, particularly following the market’s behavior between election day and inauguration day. Despite early January turbulence and the DeepSeek-related technology sector decline, the S&P 500 has maintained its upward trajectory, building on consecutive years of 20%-plus annual returns.
Historical data from CFRA indicates that when stocks show positive performance between election day and inauguration day, there’s approximately an 80% likelihood of continued gains throughout the calendar year. This year’s election-to-inauguration period saw the S&P 500 advance 3.7%, exceeding the historical average of 1.6% dating back to 1944, ranking as the 11th strongest showing out of 21 such periods.
Looking at sector performance during this crucial period, consumer discretionary led the pack with a 13.5% increase, followed by communication services at 8.7%, financials at 7.3%, and energy at 4.3%. Meanwhile, several sectors experienced declines, including consumer staples, health care, materials, and real estate.
Industry-specific analysis revealed particularly strong performances in auto manufacturing (59.5%), home furnishing retail (46.9%), security and alarm services (40.4%), and drug retail (30.1%). Corporate profit projections from JP Morgan indicate positive earnings growth across all eleven S&P 500 sectors for 2025, with six sectors expected to achieve double-digit growth. Technology and healthcare lead these projections with anticipated earnings growth of 22.3% and 20.2% respectively.
Within the top-performing sectors, several companies show significant upside potential according to analyst consensus price targets. In communications, Electronic Arts shows 30.1% potential upside, Comcast 26.8%, and Warner Brothers 23.9%. The consumer discretionary sector features MGM Resorts with 48.1% potential upside, Caesars
Entertainment at 46.3%, and Las Vegas Sands at 36.6%. Among
financials, Arch Capital Group leads with 26.7% potential upside, followed by Global Payments at 21.2% and Allstate at 21.3%.
Historical precedent suggests strong potential for continued market strength. Previous analyses indicate that the four best-performing sectors between election and inauguration typically outperform the broader market through year-end roughly 75% of the time, delivering average calendar-year gains of 17.0% compared to the S&P 500’s 15.9% average return. Even more impressive, the top ten industries during this period have historically achieved average annual gains of 26.8%.
The current market landscape presents a particularly optimistic outlook for corporate earnings, with all S&P 500 sectors projected to show positive growth in 2025, an improvement from 2024 when only nine sectors were expected to grow. However, energy, consumer staples, and real estate sectors are forecast to show relatively weaker earnings growth compared to other sectors.
For context, the election-to-inauguration performance history includes some notable extremes, with the Biden administration period recording the strongest gains at 14.3%, while the Obama transition period saw the steepest decline at -19.9% during the 2007-2009 financial crisis. While past performance doesn’t guarantee future results, the current market indicators and historical patterns suggest favorable conditions for specific sectors and industries through 2025.