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 HorizonS&P 500 TargetCommentary
3-Month~5,900Driven by easing financial conditions and strong corporate earnings.
6-Month~6,600Assumes rate cuts begin in September and no major trade disruptions.
12-MonthUp to 6,900Stretch target if inflation stays low and global conditions stabilize.
Year-End 2025~6,200Base-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.