Goldman Sachs raised its year-end forecast for the S&P 500 index to 6,800 points, up from the previous estimate of 6,600 points. This implies a potential increase of 2.04% from its most recent close, supported by the Federal Reserve’s accommodative monetary policy and strong corporate earnings. In a note released late Friday, the bank also lifted its return expectations for 6 and 12 months to 5% and 8%, respectively, indicating that the index could reach levels of 7,000 and 7,200 points.
These projections came after the Federal Reserve cut interest rates last week for the first time since December, while signaling the possibility of further reductions at its October and December meetings amid rising unemployment and signs of labor market weakness. Goldman’s analysts had previously anticipated two additional quarter-point cuts, aligning with the outlook of most major investment banks.
Earlier this year, many financial institutions had lowered their forecasts for the index to below 6,000 points, following U.S. President Donald Trump’s imposition of tariffs in April, in what was dubbed “Liberation Day.” That move sparked recession fears and triggered a global sell-off in equities. However, the gradual rollback of tariffs and rising expectations for Fed rate cuts helped ease investor concerns, reduce the probability of a recession, and drive markets toward fresh record highs.
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