Here's the Average Stock Market Return in the Last 10 Years and What Wall Street Expects in 2025

Collectively, about 5,500 companies are listed between the New York Stock Exchange and the Nasdaq Stock Exchange, according to the Securities Industry and Financial Markets Association (SIFMA). Many of those companies are included in major stock market indexes designed to measure various aspects of the domestic market.

However, the S&P 500 (SNPINDEX: ^GSPC) is generally considered the best barometer for the overall U.S. stock market due to its scope and diversity. Read on to see the S&P 500's average return over the last decade and to learn what Wall Street expects in the remaining months of 2025.

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The S&P 500 achieved a total return of 12% annually over the last decade

The S&P 500 was created in 1957, though its precursor was introduced in the 1920s. The benchmark index measures the performance of 500 large U.S. companies that cover about 80% of domestic equities and 50% of global equities by market value. It includes stocks from all 11 market sectors, but it is most heavily weighted toward the technology sector.

Companies must satisfy certain requirements to be included in the S&P 500, such as generally accepted accounting principles GAAP profitability and a minimum market value of $20.5 billion. The index is rebalanced quarterly, typically on the third Friday of March, June, September, and December. The 10 largest holdings are listed by weight below:

1. Apple: 7.2%
2. Nvidia: 6.1%
3. Microsoft: 5.8%
4. Amazon: 3.9%
5. Alphabet: 3.6%
6. Meta Platforms: 2.9%
7. Berkshire Hathaway: 1.9%
8. Broadcom: 1.8%
9. Tesla: 1.6%
10. JPMorgan Chase: 1.5%

Excluding dividends, the S&P 500 advanced 148% during the last decade, compounding at 9.5% annually. If dividends are included, the S&P 500 achieved a total return of 212% over that period, compounding at 12% annually. That period covers a broad range of economic and market environments, so similar returns are possible over the next decade.

What Wall Street expects from the U.S. stock market in 2025

The S&P 500 soared when Donald Trump won the presidential election in November, and the index maintained its momentum into February before concerns about the economy caused a downturn. Specifically, the S&P 500 has fallen 15% from the high it reached less than two months ago because investors are unsettled by the radical shift in U.S. trade policy under the Trump administration.

With the prospect of severe tariffs on the horizon, many Wall Street analysts have revised their outlooks to reflect slower economic growth and higher inflation. Many have also lowered their year-end forecasts for the S&P 500, though the consensus still calls for substantial gains from the index's current level of 5,196, as detailed below:

Source: Yahoo Finance, Reuters.

As shown above, the median year-end target for the S&P 500 is 6,100 among 17 prominent investment banks and research firms. That forecast implies 17% upside from its current level of 5,196, though it still represents a substantial downward revision from where we started the year. The median year-end target among the firms listed above was 6,600 in December, but analysts have grown increasingly pessimistic due to the burgeoning trade war.

The lesson for investors is to avoid anchoring to target prices. President Trump on April 9 announced plans to delay his reciprocal tariffs for 90 days, during which time the U.S. may negotiate deals with other countries. We may yet avoid the worst consequence of the trade war. Alternatively, the aggressive, reciprocal tariffs Trump outlined earlier this month may go into effect when the 90-day postponement ends. In that scenario, I think more Wall Street firms would lower their year-end forecasts for the S&P 500.

Regardless, investors should remember that every past drawdown has been an opportunity to buy stocks, and there is no reason to think this one will be different. The situation could certainly get worse in the coming months, perhaps much worse. But history says the S&P 500 will eventually reach new highs. So, now is a good time for patient investors to put money into high-conviction stocks at a measured pace.

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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Wells Fargo is an advertising partner of Motley Fool Money. JPMorgan Chase is an advertising partner of Motley Fool Money. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. Bank of America is an advertising partner of Motley Fool Money. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Citigroup is an advertising partner of Motley Fool Money. Trevor Jennewine has positions in Amazon, Nvidia, and Tesla. The Motley Fool has positions in and recommends Alphabet, Amazon, Apple, Bank of America, Berkshire Hathaway, Goldman Sachs Group, JPMorgan Chase, Meta Platforms, Microsoft, Nvidia, and Tesla. The Motley Fool recommends Barclays Plc and Broadcom and recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.