The US stock market has hit a record high in 2025 with rich valuations despite trade wars and tariffs. While the Nasdaq Composite is up close to 24% year-to-date, the Dow Jones Industrial Average spiked 12% in the same timeframe. In addition, the S&P 500 index has also spiked 17% YTD, delivering robust returns with a solid growth track. Wall Street CEOs have now warned that the US stock market has peaked and investors must be ready for a 10% to 15% pullback.
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US Stock Market Could Fall 15%: Wall Street CEOs
Corporate earnings are strong, but “what’s challenging are valuations,” said Mike Gitlin, CEO of Capital Group. He stressed that Wall Street “would say we’re somewhere between fair and full, but I don’t think a lot of people would say we’re between cheap and fair,” he said on the stock market’s valuation. A 10% to 15% pullback could shake the markets but reward long-term holders after the correction. Gitlin explained that the correction would occur between 12 to 24 months.
Wall Street CEOs echoed similar views to Gitlin’s, citing that the stock market could face a correction. Morgan Stanley’s CEO, Ted Pick, and Goldman Sachs’ chief, David Solomon, highlighted that the possibility of a pullback is higher. “Yes, markets seem expensive, but the reality is that systematic risk has probably narrowed,” said Pick.
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“We should also welcome the possibility that there would be 10% to 15% drawdowns that are not driven by some sort of macro-cliff effect,” said Pick. However, he exclaimed, “That’s a healthy development.” He added that the 10% to 15% market pullback will be a part of the positive cycle. “It just means things run and then they pull back so people can reassess,” said Solomon. Since the majority of Wall Street CEOs have warned about the US stock market, a correction seems to be inevitable.