• Webull’s Rob Talevski predicts rate cuts will boost ASX in 2025
  • US market momentum could support ASX growth
  • Mining sector and Tesla set to shine in 2025, he said

 

At the time of writing, the S&P/ASX 200 Accumulated (AXJOA) index – an index that assumes all cash dividends are re-invested – was up around 14% on a year-to-date basis.

This has been mostly driven by a local earnings boom, optimism around interest rates peaking and rallies in US equities.

And as we wrap up the strong year, the question for 2025 is whether the market can sustain these high valuations and push even higher.

The CEO of trading platform Webull Securities Australia, Rob Talevski, offered his insights into what could drive the ASX higher in 2025.

With stock prices already stretched, Talevski believes several key factors will need to align for further growth.

He highlighted four key market dynamics that could shape the upcoming year.

 

Rate cuts the key

One of the first dynamics Talevski points to is the potential for rate cuts, which could provide a much-needed boost to investor sentiment.

After a long period of interest rate hikes, the RBA is expected to start easing rates in 2025, likely from mid-year.

“I think rates have peaked,” Talevski said.

“What was encouraging is the RBA weren’t commenting [in its latest release] about increasing rates like they were before. So, I think that’s a positive sign.”

He anticipates at least three rate cuts by the middle of next year, which could fuel growth in sectors like M&A activity and consumer spending.

These cuts, Talevski believes, will “drive significant movements” in the local economy.

They could also have a major impact on local equity markets, which may see an extended rally through the latter half of 2025.

“By Q2 onwards, I think we’ll see a lot more confidence, and I believe the equity markets will establish new highs.”

 

Wall Street’s momentum

Talevski is also optimistic about US equities, especially given the strong performance in 2024.

He expects the momentum to continue into 2025, despite some challenges around tariffs and trade wars, particularly with China.

“Wall Street will likely hit new highs again in 2025,” Talevski says, adding that easing cycles in both the US and Australia should play a significant role in boosting market confidence.

As long as the US-China tensions stabilise, he predicts that US markets will continue to see growth, which in turn could support the ASX as well.

 

The mining sector is one to watch

Talevski has highlighted the mining industry as a key focus for 2025.

Australia’s status as a key supplier of raw materials means that strong demand from countries like China will continue to fuel growth in the sector.

“I think we’ll see a really strong growth in the mining sector,” he said.

“Australia is the world’s major supplier of most raw materials, so there’s going to be ongoing demand for that. China’s economic plan for 2025 will be a key factor here.”

He expects mining stocks to be one of the “shining stars” of the market next year, with strong performance likely throughout 2025.

 

Challenges for banks

Talevski however said there are potential challenges ahead, especially for the banking sector, which makes up a significant portion of the ASX.

While banks are poised to benefit from rate cuts, their net interest margins could face pressure as rates ease.

“The major banks dominate our index, and while they’ll benefit from rate cuts, they tend to pass on the cuts more slowly,” he said.

“It’s important for the banks to maintain healthy margins, and I think that will play a role in the overall stability of the market.”

Talevski also noted that with the bond market expected to “peter out,” more money could flow into equities, especially stocks with strong dividend yields.

As interest rates fall, the attraction of fixed income assets, like bonds, diminishes, pushing investors towards ASX-listed companies offering steady dividends.

 

Talevski’s tips for 2025

As for specific stocks to keep an eye on,  Talevski points to Tesla as a company likely to continue its growth, particularly as the electric vehicle sector expands and governments push pro-electric vehicle legislation.

“Companies working on carbon emissions reduction technologies, particularly those in the nuclear space, could also see strong growth in 2025,” he says.

He’s also excited about Webull’s new offering, designed to make investing easier.

One of those offerings enables investors automate investments through Webull’s “How You Want to Invest” function, allowing users to set up recurring investments in stocks on a weekly, fortnightly, or monthly basis.

This feature, he said, is particularly popular with younger investors who may not have a large lump sum to invest.

 

Now read: Shaw says 2025 could be the year to feast on ASX small caps and these are its 10 favourites

 

The views, information, or opinions expressed in this article are solely those of the interviewee and do not represent the views of Stockhead.

Stockhead has not provided, endorsed or otherwise assumed responsibility for any financial product advice contained in this article.

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