“Why Are Stocks Up? Nobody Knows. A torrent of bad news hasn’t been enough to sink the market.” That’s how a brilliant—but fake—Wall Street Journal article began, published by The Weekly Standard back in 1998.
In 2025, the same could be said about the market’s performance for much of the year: Few predicted it, and even fewer could coherently explain it.
The Satire That Rings True
The satirical piece went on: “CNBC analysts confidently asserted it had something to do with the Senegalese money supply, but others pointed to revised monthly figures showing a poor tuna haul off the Peruvian coast.”
It was titled “The First Totally Honest Stock Market Story” and it nailed a simple truth about investing commentary: Often, there really is no reason. You have to zoom out—way out—for cause-and-effect to prevail.
When Logic Doesn’t Apply
Some days are easy to decode. A surprise profit warning or a blowout economic report can jolt the market up or down. But even then, markets can open strong and reverse sharply—defying any neat explanation.
Stretch that timeline out to months, and the weirdness grows. There were notable double-digit rallies lasting a couple of months apiece in 2007 and 2008 just as the wheels clearly were falling off the housing market.
Pundits Still Find a Way to Explain
The good news for pundits? That kind of weirdness gets easier to explain retroactively.
A rally amid negative headlines? “The market loves to climb a wall of worry.”
Flat markets despite strong earnings? “Stocks are in a consolidation phase.”
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The 2025 Puzzle
This year has made market seers tie themselves in knots. Stocks began strong with the so-called “Trump trade,” fueled by expectations of pro-business policies. Then came the “Liberation Day” tariffs—and a plunge to near bear-market territory just a week later.
Even with the possibility that tariffs on key trading partners like the EU and Japan might be postponed, those already in place are the highest since the 1930s.
Economists surveyed by the Journal now peg the odds of a U.S. recession within a year at 33%—up from 22% at the start of 2025. Meanwhile, earnings estimates for the S&P 500 are 3% lower than they were then.
And the market? Up 7% this year, and 27% since the April low—one of its fastest advances ever.
A Strategist’s Whiplash
Goldman Sachs’ David Kostin’s year illustrates the whiplash. He began 2025 with a target of 6500 for the S&P 500. After early-year slumps, he cut it to 6200. By March, as recession fears grew, it was down to 5700. Since then? He’s lifted it twice—to 6100, then 6600 earlier this month.
Short-Term Noise, Long-Term Truth
“You would never expect a sports handicapper to pick who will win the World Series in 2035.” The stock market, though, is different. A savvy strategist might make a decent guess about where stocks will be in a decade. But calling the next quarter? Pure noise. Too much emotion. Too much randomness.
Yet newspapers and readers care mostly about this week or this year. That’s not the only reason Wall Street favors short-term predictions.
“It produces a lot more customer activity.”