Stocktwits Poll Shows Retail Most Bullish On Tech Sector’s 2025 Outlook Despite Macro Uncertainty

The bull market that started in Oct. 2022 continues to play out, with ample support from technology stocks, mainly the big techs and those leveraging artificial intelligence (AI) technology.

The late-year market surge in 2024 was based on optimism that the Federal Reserve will continue with its normalization campaign. 

Fed On Pause Mode?

After taking the Federal funds rate to a 23-year high of 5.25%-5.50% in July 2023, the central bank kept it steady until Aug. 2024 due to its cautionary stance on inflation. 

Three quarter-basis-point cuts followed, bringing down the rate to 4.25%-4.50%. 

As the Federal Open Market Committee (FOMC) prepares for a two-day meeting beginning on Jan. 28, the futures market is pricing in a 97.3% probability of a pause decision, according to the CME FedWatch Tool. The assessment comes amid evidence pointing to a strong economy.

FedWatch Tool Chart Courtesy of CME

The December jobs report showed a strong job gain of 256,000, marking the highest increase since March. The jobless rate ticked down to 4.1%.

The November Job Openings & Labor Turnover Survey reinforced the labor market’s health, as job openings climbed to 8.1 million, about 16% above the pre-pandemic levels.

Inflation reports released this week were mixed. Producer prices for December came above expectations, while the retail prices counterpart was benign.

On the other hand, the retail sales report for December showed moderating growth.  Commenting on the report, LPL Chief Economist Jeffrey Roach said, “Consumer spending supported the overall economy last quarter, and we expect Q4 annualized growth to decelerate to 2.5% after growing 3.1% annualized in Q3.”

Amid the mixed macro signals, we asked the retail community for its opinion regarding the trajectory for the major sectors.

Retail Bullish On Techs

Technology won hands down in the Stocktwits poll, which closed on Jan. 15 and received responses from 2,800 platform users.

Fifty-seven percent of the respondents said they were most bullish on the technology sector. Energy, financials and healthcare received 21%, 13% and 9% of the votes, respectively.

LPL Chief Technical Strategist Adam Turnquist said in a recent report that forward momentum will continue in 2025, albeit at a more moderate pace. Applying the average gains of 6.2% seen in the years following the ones that correlated with 2024, the strategist said the S&P 500 Index could end 2025 at 6,250. 

Fund Manager Louis Navellier said in a note to clients that the concerns of a weak January are behind. “If earnings continue to surprise to the upside, we should end the month on a high note,” he said.

However, Navellier highlighted the incoming Trump administration’s tariff proposals as the wild card.

A strong earrings report from Taiwan Semiconductor Manufacturing Company Limited ($TSM) - the chip supplier to most tech companies- is a testament to the rising AI-related demand, potentially supporting the sector’s earnings growth.

The unfolding December quarter reporting season will offer more clarity on which way the tech sector is headed. Analysts expect broadening of the rally, with laggards such as the tech software playing a catch-up.

In premarket trading on Friday, the Invesco QQQ Trust ETF (QQQ) was up 0.42% to $515.21.

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