Why BlackRock's Rick Rieder is confident in equities in the second half as S&P 500 nears high

CHICAGO — BlackRock's Rick Rieder is confident a stock market nearing all-time highs can go even higher in the second half of 2025, as inflation comes down because of artificial intelligence.

“I think it's the greatest technology revolution ever. So, what does it mean? My personal view, inflation is coming way down,” Rieder said Wednesday during a keynote speech at the Morningstar Investment Conference.

The investment chief of global fixed income said he expects the productivity gains to be made from artificial intelligence will offset any hit to inflation from tariffs, which he said will be a one-time adjustment for the U.S. economy rather than a lingering challenge.

He added that the U.S. economy is unlikely to fall into a recession, given its reliance on services for growth, rather than goods — which are more cyclical.

Rieder's comments come as the S&P 500 trades less than 1% below its record high set in February. While the market still contends with several macroeconomic challenges, including a tenuous ceasefire in the Middle East, and higher tariffs that will likely pressure the U.S. dollar, he remains stocks will surmount those challenges.

“The S&P 500 returned almost the entire market cap of the DAX in 2024,” Rieder told investors. “When I talk to international investors ... they're going to diversify away from Treasurys to some extent, but they're not going to diversify away from U.S. equities because there's no other game in town.”

To be sure, Rieder thinks some investors will be disappointed with monetary policy in 2025, noting he expects the Federal Reserve to cut rate just twice this year starting in September — as it works through the temporary impact of higher tariffs.