Key takeaways:

  • Corporate stock buybacks in 2025 are off to their strongest year-to-date start in recent history.
  • Future market volatility may be cushioned as companies seize opportunities to repurchase shares at lower valuations.

06/18/2025 – What’s behind the stock market’s impressive climb over the past two months? Several technical indicators—such as price momentum, trading volume, and market breadth—have helped set the stage for the rally that began after the S&P 500® Index hit a low on April 7.

Stronger-than-expected Q1 earnings—especially from tech—fueled the rally. Technology companies led the way, posting earnings growth of roughly 16% for the first quarter, outpacing all other S&P 500 sectors. Investors responded enthusiastically, driving tech stocks higher—particularly the “Magnificent 7,” which contributed nearly half of the S&P 500’s gains since the April low. As a result, the Index has returned to elevated territory, now trading at 21 times forward earnings.

 

Bar chart titled 'S&P 500® Index company stock repurchases' showing annual share repurchases from 2010 to 2025. Gray bars represent actual repurchases in billions of dollars; a blue bar represents the 2025 estimate. Blue upward triangles and red downward triangles indicate yearly percentage changes. Notable points include a peak in 2018 around $800 billion, a drop in 2020, and a projected $1,075 billion in 2025 with a 16% increase.t

One factor that’s flown under the radar is the surge in corporate stock buybacks. While institutional investors pulled back during the market selloff, retail investors kept buying—and so did companies. In fact, firms stepped up their buyback activity at a near-record pace, even amid the broader market volatility. Notably, 2025 has delivered the strongest year-to-date pace for corporate stock buybacks in several years. April alone marked the third-highest monthly total for buybacks in over a decade. This trend not only signals companies’ confidence in their long-term outlooks but also contributes to market liquidity and price support—factors that can help dampen volatility during periods of uncertainty.

Some market analysts now predict that S&P 500 companies could surpass $1 trillion in share buybacks this year—a milestone that would mark the highest annual total on record. This level of activity is expected to provide a meaningful tailwind for U.S. equities. And with institutional investors still on the sidelines, future bouts of market volatility may be cushioned as corporations step in to repurchase shares at more attractive valuations.

While corporate buybacks can help cushion volatility and boost liquidity, equities will always be subject to fluctuations. That’s why we believe investors should focus on building diversified portfolios and sticking to strategies aligned with their long-term goals.
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Author(s)

Mark Hackett, CFA, CMT

Mark Hackett, CFA, CMT

Chief Market Strategist, Nationwide Investment Management Group

Mark Hackett is the Chief Market Strategist for Nationwide’s Investment Management Group, bringing more than 20 years of experience in the asset management industry to the role.

Full bio

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