Larry Williams forecasts bullish 2025 for U.S. stocks, warns of potential volatility

Veteran trader and market analyst Larry Williams has released his highly anticipated annual forecast for 2025, predicting a bullish year for the U.S. stock market but cautioning investors to brace for potential volatility and a possible downturn in 2026.

In his 20th annual report, Williams, known for his cycle-based market predictions, outlined a positive outlook for 2025, driven by long-term cyclical patterns and historical trends. However, he warned that while the market is expected to rise, it won’t be a smooth ride, with periods of decline and consolidation throughout the year.

Key Predictions for 2025

Williams’ forecast, based on decades of market data and cyclical analysis, suggests that the Dow Jones Industrial Average (DJIA) will experience a bullish trend in 2025, with a significant rally expected in the middle of the year. He emphasized that the long-term cycle, which began in early 2023, will continue to support higher prices until the end of 2025.

“The long-term cycle low that began at the start of 2023 will last until the end of 2025, suggesting that 2025 will be a bullish year overall,” Williams wrote in his report. However, he cautioned that the market will not move in a straight line, with periods of volatility expected, particularly in the second half of the year.

Williams also highlighted the importance of the Decennial Pattern, a historical trend that has accurately predicted market movements for nearly a century. According to this pattern, years ending in “5” have historically been strong for stocks, and 2025 is expected to follow suit.

“The Decennial Pattern for 2025 is very bullish,” Williams said. “It tells us to buy stocks and hold on for dear life, as the market is likely to see significant gains.”

Presidential and Economic Cycles

Williams introduced a new twist to his analysis by combining the Decennial Pattern with the Presidential Cycle, which examines market performance during the first year of a new or incumbent president’s term. Historically, the first year of a presidency has been marked by uncertainty and market weakness, but Williams’ combined model suggests that 2025 will buck this trend.

“The combination of the Decennial Pattern and the Presidential Cycle points to a strong market in 2025, with a potential dip in June and July, followed by a rally into August and beyond,” Williams explained.

On the economic front, Williams predicted that inflation will continue to decline through 2025, with a possible uptick in early 2026. He also noted that industrial production will remain robust, supporting economic growth and stock market performance. However, he warned that a bear market could begin in early to mid-2026, following a peak in industrial production in August 2025.

Housing Market and AI

Williams also weighed in on the housing market, predicting a decline in home prices into early 2027 due to an oversupply of new homes. “This is a buyer’s market,” he said, advising potential homebuyers to act accordingly.

On the topic of artificial intelligence (AI), Williams expressed skepticism about its ability to predict market movements. “AI can provide insights, but it’s no substitute for hard work and thorough research,” he said, cautioning investors to remain vigilant and informed.

Final Thoughts and Advice

Williams concluded his report by advising investors to use his forecasts as a guide rather than a guarantee. “Cycles can help us identify the best times to buy and sell, but they are not foolproof,” he said. “Always consider your financial situation and risk tolerance before making any investment decisions.”

As for 2025, Williams remains optimistic but cautious. “The market is poised for growth, but there will be bumps along the way,” he said. “Stay informed, stay disciplined, and be prepared for volatility.”