The Fed is expected to cut rates for the first time since 2024 due to weak job data, prompting Goldman Sachs to revise its S&P 500 targets for 2025 and 2026. The S&P 500 historically gains 1.7% monthly during rate-cutting periods and falls 0.5% when rates rise. The Fed fears inflation but may prioritize job growth.

Goldman Sachs predicts steady rate cuts through 2026, with the S&P 500 poised for additional gains. Despite rising inflation, the Fed is expected to focus on jobs, potentially leading to multiple rate cuts. The S&P 500 has seen significant growth following optimism over trade deals and tax cuts, hitting all-time highs. Goldmans Sachs forecasts a 2% increase by 2025 and 6% by mid-2026, with earnings growth supporting market gains.

Read more at Yahoo Finance: Goldman Sachs revamps S&P 500 target for 2026