①Goldman Sachs raised its annual target for the S&P 500 index to 6800 points, representing a 2.04% increase from the latest closing price, based on the Fed's dovish stance and robust corporate earnings; ②Goldman Sachs also increased its expected return rates for six months and twelve months to 5% and 8%, respectively, implying target prices of 7000 and 7200 points; ③Recent tariff reductions and expectations of an accommodative Fed policy have driven the U.S. stock market to new highs.
Goldman Sachs, the Wall Street investment bank, has raised its year-end target for $S&P 500 Index (.SPX.US)$ from the previous 6,600 points to 6,800 points, implying an expected increase of 2.04% from its latest closing price. This adjustment is based on the dovish stance of the Federal Reserve and robust corporate earnings performance.
As of last Friday (September 19), the S&P 500 index closed at 6664.36 points, rising 0.49%.
Meanwhile, in this report issued by Goldman Sachs, the bank also revised upwards its six-month and twelve-month expected returns for the S&P 500 Index to 5% and 8%, respectively, implying corresponding target prices of 7000 and 7200 points.
Last week, the Federal Reserve cut interest rates for the first time since December of last year. Amid rising unemployment and signs of weakness in the labor market, the Fed signaled further rate cuts during its October and December meetings.
Analysts at Goldman Sachs previously stated that they expect the Fed to cut rates by 25 basis points at each of these two meetings, which is broadly in line with the forecasts of most major brokerage firms.
Bullish Sentiment Rising
Earlier this year, major brokerage firms cut their S&P 500 targets to below 6000 points after April’s imposition of tariffs by U.S. President Donald Trump intensified fears of a recession and triggered a global stock market sell-off.
However, recent tariff reductions and expectations of potential easing by the Federal Reserve have calmed investor sentiment, reduced the risk of a recession, and propelled the stock market to new record highs.
Amid Goldman Sachs' upward revision of its target, strategists from Wells Fargo & Co, Barclays, and Deutsche Bank, among others, have also recently raised their S&P 500 index targets this month, citing resilient earnings and the ongoing surge in artificial intelligence investment as key pillars supporting the next phase of market growth.
Deutsche Bank raised its forecast for the index in 2025 from 6,550 points to 7,000 points, making it the most optimistic among the forecasts; Ohsung Kwon, equity strategist at Wells Fargo & Co, set the year-end target for the S&P 500 Index at 6,650 points and projected that the index would rise to 7,200 points by the end of 2026; Barclays analysts increased their forecast for 2025 from 6,050 points to 6,450 points.
Editor/Doris