Global Stock Market Projected to Reach $127.4 Trillion by 2025, Still Below 2021 Peak

Despite a generally positive outlook for 2024, the global stock market has experienced significant volatility over the past nine months, with marked differences in industry and regional performance. This trend is expected to persist, keeping the market value below 2021 levels.

According to Stocklytics.com, the global stock market is forecasted to reach $127.4 trillion by 2025—$900 billion short of its 2021 peak.

Annual Growth Rate to Drop to 2.4%

Throughout 2023 and early 2024, technological innovation drove substantial stock market growth, particularly in the tech sector, which consistently outperformed other industries. However, in recent months, this momentum has reversed.

After two years of robust growth, tech stocks have sharply declined, influenced by factors such as U.S. export restrictions on AI chips to China, anticipated interest rate cuts, valuation concerns, and mixed earnings reports. As investor confidence in tech wanes, many have redirected their focus to sectors like real estate, utilities, and financial services, which have shown double-digit returns.

Market volatility is expected to persist as investors balance strong corporate earnings and economic growth with risks related to inflation, geopolitical tensions, and high valuations. As a result, stock market growth is anticipated to slow in 2024.

Statista Market Insights predicts that by the end of 2024, the combined market capitalization of all stock exchanges will grow 6.6% to $124.4 trillion, an increase of $8 trillion from 2023 and $14 trillion above 2022. However, growth will slow in 2025, with the market value reaching $127.4 trillion—an annual increase of just 2.4%, the lowest growth rate since the 2022 market slump. After a 14% decline in 2022, the market recovered with growth rates of 5.6% in 2023 and 6.6% in 2024, still far below the double-digit surges of 30.4% and 20.6% in 2020 and 2021.

Stagnation in US and UK Markets, India to Lead Global Growth

While the U.S. remains dominant in the global stock market, accounting for 38% of total value, it faces a challenging year ahead. Statista forecasts that the U.S. market will stagnate in 2025, with the combined value of U.S. stock exchanges holding steady at $48.7 trillion.

The UK stock market is expected to follow a similar trajectory, with a projected market cap of $3.6 trillion, unchanged from the current year. China’s stock market will see modest growth of 1.5%, outpaced by Japan and India.

India is expected to be a major driver of growth, with its stock market projected to expand by 8% to $4.1 trillion in 2025. Japan will see a 5% increase in market value, positioning it as another key player in the global stock market landscape.