Castle Securities Strategist: U.S. stocks may experience short-term fluctuations and are expected to close strongly at the end of the year

Scott Rubner, head of equity and equity derivatives strategy at Citadel Securities, said the rally that has propelled US stocks to new highs is likely to experience some volatility in the coming weeks, but is expected to end strongly by the end of the year. The S & P 500 is up 17 per cent from its lows for the year, with short-term risks including overvalued valuations, seasonal volatility common in September and October and a possible sell-off by trend-following funds, Mr. Rubner wrote. However, these underlying signs of weakness are unlikely to last, as the tailwinds supporting the rally - including corporate spending on artificial intelligence and demand from retail investors - will continue to power the market in the final months of 2025. "Be positive on structural demand but hedge against short-term risks as September-October remains a fragile window," Mr. Rubner wrote, adding that investors should view the short-term pullback as a buying opportunity.