US-China trade negotiations ignite optimistic sentiment, Goldman Sachs expects US stocks to rise another 11%

According to the Zhitong Finance APP, Goldman Sachs has raised its target for U.S. stocks due to the easing of U.S.-China trade tensions, which has prompted a return to the "Buy America" trade. Goldman Sachs strategists, including David Kostin, now expect the S&P 500 index to reach 6,500 points in the next 12 months, up from the previous forecast of 6,200 points. The new prediction implies an approximately 11% increase from Monday's closing price.

U.S. stocks rebounded on Monday after negotiators from the world's two largest economies agreed to temporarily lower tariffs, with traders betting that the U.S. can avoid an economic recession. However, Goldman Sachs remains cautious.

Goldman Sachs strategists stated, "The market's optimistic outlook for economic growth, along with uncertainty regarding the extent of the upcoming slowdown in economic and corporate profit growth, may limit price-to-earnings ratios in the coming months."

The S&P 500 index surged after tariff negotiations

Goldman Sachs had lowered its S&P 500 index estimates twice in March, citing rising recession risks and uncertainties related to tariffs. Strategists noted that while the latest agreement alleviates these concerns, particularly for large tech stocks, the overall profit outlook remains uneven.

They stated, "Although the growth outlook has improved recently, the tariff rates in 2025 may be significantly higher than in 2024, putting pressure on profit margins." Goldman Sachs advises investors to focus on stocks of companies with strong pricing power that can maintain profit margins amid rising input costs