Evercore ISI believes President-elect Donald Trump’s pro-business policies could drive the stock market to new heights next year, predicting the S & P 500 will climb more than 20% in its most optimistic bull case. The investment firm see “momentum with positive business sentiment around Trump, more volatility like 2018 and typical of the year following two ‘Roaring 20%+’ return years as valuations [are] extended, sensitive to policy and geopolitical news flow,” senior managing director Julian Emanuel said in a note to clients. The firm set its base case for the end of 2025 at an S & P 500 level of 6,800, which would still represent a 12% gain from Friday’s close of 6,051. For its bull case, however, Evercore sees the equity benchmark soaring to 7,400, a near 23% gain from current prices. For its bear case, the firm sees the S & P 500 falling to 5,200, largely owing to concerns around higher bond yields, stubborn inflation and muted economic growth resulting in stagflation. .SPX YTD mountain S & P 500 Evercore’s target is higher than the average forecast among top Wall Street strategists, which stands at 6,630 for 2025, equivalent to about a 10% gain next year, according to CNBC Pro’s Market Strategist Survey. (Pro subscribers can track the strategist survey throughout the year here as the forecasters update their outlooks.) The S & P 500 appears set to wrap up a strong 2024 with strong gains, thanks to optimism toward Trump’s market-friendly policies coupled with easing inflation and lower interest rates. The benchmark is up 27.2%, excluding reinvested dividends, on track for its best year since 2019. Emanuel said this bull cycle still has room to run despite stretched valuations, but investors should expect heightened volatility in the Trump administration. The “current Bull Market is young in terms of time and total return; [but] returns [are] well below those of prior ‘expensive’ periods,” Emanuel said. “Higher volatility though, like Trump’s 2018, is [the] base case given Changes in Policy, Geopolitical Dynamics and Asset Price sensitivity to developments with an historically expensive market valuation.” — CNBC’s Michael Bloom contributed reporting.