The stock market rally still has room to run, but 2025 will not be as rewarding to investors as the prior two years, according to Fundstrat's Tom Lee. The strategist, who has gained a following in recent years for his timely market calls and general optimism about stocks, released his new outlook for 2025 on Wednesday. Lee projects the S & P 500 rallying about 16% rally from here to 7,000 by the middle of 2025. However, Lee then sees the index retreating to 6,500 by the end of the year. That would make for a full-year gain of roughly 7.7%. "There are strong tailwinds supportive of stocks in 2025. But we see this as a tale of 'two years,'" Lee said. The factors supporting further gains are a pair of "puts" from the Federal Reserve and the incoming Trump administration, Lee said. The Fed can focus more on supporting employment as inflation eases, while the Trump administration could implement policies are boost earnings growth, Lee said. A market "put" is a Wall Street shorthand for saying that a factor can help create a floor of support for stocks. .SPX YTD mountain The S & P 500 has gained more than 26% this year, breaking above the 6,000 level. Historical patterns are the reason for the projected second-half swoon. The S & P 500 is up more than 26% in 2024, its second-straight year with a gain of more than 20%. History shows that such rallies struggle during the third year, according to Lee. "5 of 5 precedents saw stocks do worse in second half of year 3," the Fundstrat outlook said. The new Trump administration does bring some potential negatives for the stock market. Tariffs are number one risk for 2025, Lee said, and there is also a chance that the push for more government efficiency could lead to economically damaging spending cuts. Lee has also been a long-term bull on bitcoin . He said in his note that that the leading cryptocurrency has "upside to $250,000" next year. Bitcoin crossed $100,000 for the first time last week. Fundstrat and Lee gained prominence in 2020, when he correctly called for a rebound rally after the pandemic-related sell-off early that year. He was also more bullish than most major Wall Street strategists heading into 2024 , though the market still surpassed his original S & P 500 target of 5,200. He previously worked at JPMorgan.