The evolving bull market: Insights from Jurrien Timmer - September 22, 2025
Fidelity’s Director of Global Macro Jurrien Timmer, shared his insights on the dynamics shaping the current bull market.
Here are some of the key points from his commentary.
Bull market momentum and valuation
The stock market is firmly in a bull phase, with the S&P 500 trading well above its long-term trend line, reflecting strong momentum and investor confidence. However, valuations are elevated, with the index trading at about 24 times expected earnings. This premium indicates investors are paying a high price relative to value, raising questions about the sustainability of the rally. Growth stocks, especially in technology, continue to lead.
Global expansion and liquidity
The bull market has expanded beyond the U.S., becoming a global story. The MSCI All-Country World Index, which includes the U.S., shows broad participation with rising stocks and increasing global money supply. Liquidity remains plentiful, supporting this global advance. This broader market participation offers a larger opportunity set beyond dominant U.S. tech giants, encouraging consideration of international diversification.
Fiscal stimulus and multipolar trade dynamics
There is a shift toward fiscal dominance as governments in the U.S., Europe and elsewhere increase spending to support growth amid demographic challenges and high debt levels. Some countries are moving toward higher spending levels, which helps sustain the bull market. Concurrently, the global trade environment is becoming more multipolar, with countries seeking new trade partners and adjusting fiscal policies accordingly. This evolving geopolitical landscape influences market sectors and investment opportunities.
Federal reserve policy and interest rates
The Federal Reserve has recently cut interest rates to around 3%, signalling a more accommodative stance. Despite inflation remaining sticky, this suggests some room for further easing if needed. The 10-year Treasury yield remains near 4%, reflecting market uncertainty. Labour market conditions and inflation trends could impact Fed policy and market dynamics.
AI innovation and market sentiment
The current market environment parallels the late 1990s tech boom, driven by advances in artificial intelligence (AI). Enthusiasm around AI, especially among leading tech companies, is contributing to a strong rally and improved earnings estimates since April. However, caution remains about the potential for a speculative bubble and ongoing market volatility.
Conclusion: strategic positioning in a complex market
This bull market is characterized by strong momentum, global participation, fiscal stimulus, accommodative monetary policy and technological innovation, yet elevated valuations and shifting geopolitical and economic factors require vigilance.
