Goldman Sachs updates S&P 500 forecasts
Goldman Sachs has issued updated S&P 500 forecasts that reflect a cautiously optimistic outlook for U.S. equities through the end of 2025. The revisions come amid shifting expectations for Federal Reserve rate cuts, persistent earnings strength, and emerging trade policy uncertainties.
📌 Key Forecasts
Time Horizon | S&P 500 Target | Commentary |
---|---|---|
3-Month | ~5,900 | Driven by easing financial conditions and strong corporate earnings. |
6-Month | ~6,600 | Assumes rate cuts begin in September and no major trade disruptions. |
12-Month | Up to 6,900 | Stretch target if inflation stays low and global conditions stabilize. |
Year-End 2025 | ~6,200 | Base-case scenario revised down from 6,500 in March, due to rising geopolitical and trade concerns. |
🔍 Rationale Behind the Revisions
- Fed Policy: Goldman expects the Fed to cut rates three times starting in September 2025, which should ease financial conditions and boost equity multiples.
- Earnings Growth: S&P 500 earnings are forecast to grow +11% in 2025 and +7% in 2026, supporting higher index levels even if valuation multiples remain steady.
- Trade Risk: Earlier enthusiasm tied to tariff relief has been tempered by recent political volatility, prompting a reduction in the year-end target from 6,500 to 6,200.
🧠 Takeaway for Investors
Goldman’s forecast reflects a dual scenario:
- Bull Case: If inflation stays subdued and global tensions ease, the S&P 500 could approach 6,600–6,900 in 2025.
- Base Case: With policy and geopolitical risks factored in, 6,200 remains a more conservative year-end estimate.
Investors may want to remain constructive on equities but prepare for volatility around macro headlines—especially related to Fed actions and trade dynamics.