Investors expect the market to remain bullish over the course of the next months as President Donald Trump takes office.
New findings from Morgan Stanley Wealth Management today show that 58% of investors surveyed continued to be bullish on the market, in line with 59% from last quarter. Two out of three investors (64%) expect the market to continue rising by the end of the quarter.
Similarly, most respondents expressed support over rate cuts, with 59% adding that they believe the economy is healthy enough for the Fed to cut interest rates this quarter. However, the number is still a nine-percentage point drop from last quarter.
The results come as respondents continue to voice high concerns with inflation and market volatility. According to Morgan Stanley, inflation concerns remain top at 45%, similar to 46% last quarter, while 24% say they worry about market volatility, up from 23% in Q4.
Their anxieties could be related to the arriving Trump administration, Morgan Stanley attributes, although concerns over the new presidency dropped 13 percentage points since last quarter. Compared to 34% of investors who cited concerns over the incoming administration in Q4, only 21% now say they are worried about Trump’s second term.
Investor qualms are much lower compared to 2024, when consumers were notably more anxious over the impacts the general election would have on the market. A 2024 Q3 study by Allianz Life previously found that 74% of its respondents were worried about the effects the election could have on market volatility.
Now, it seems investors are acclimating with the incoming administration. “As with any new administration coming in, potential policy changes can cause uncertainty in the markets,” said Chris Larkin, managing director and head of Trading and Investing for E*TRADE from Morgan Stanley. “That said, investors remain optimistic and resilient amid a soft start to 2025.”
Morgan Stanley’s survey was conducted from January 6 to January 16 and fielded responses from 909 self-directed investors.
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Amanda Umpierrez is the Managing Editor of 401(k) Specialist magazine. She is a financial services reporter with over six years of experience and a passion for telling stories and reporting news. Amanda received her degree in journalism and government and politics at St. John’s University. She is originally from Queens, New York, but now resides in Denver, Colorado with her partner. In her free time, Amanda enjoys running, cooking, and watching the latest drama show.
