Goldman Sachs: Adjusted the 12-month target for the S&P 500 index from 6,500 points to 6,900 points, expecting a return rate of 11%
Goldman Sachs, in a report released on July 8, 2025, raised its 12-month target for the S&P 500 index from 6,500 points to 6,900 points, expecting a return rate of 11%. The reasons for the adjustment include the possibility of the Federal Reserve cutting interest rates earlier, strong fundamentals of tech giants, and a reduced probability of a U.S. economic recession to 35%. In the short term, the return rate forecasts for three months and six months have also been raised to +3% and +6%, respectively
According to the Zhitong Finance APP, Goldman Sachs raised its return rate forecast for the S&P 500 index in a report released on July 8, 2025, primarily due to expectations that the Federal Reserve will cut interest rates earlier and more significantly, as well as the continued strong fundamentals of large-cap stocks (especially tech giants).
Specifically, the three-month return rate forecast has been raised from previous levels to +3%, corresponding to a target point for the S&P 500 index of 6,400 points.
The six-month return rate forecast has been raised to +6%, with the index point estimate increasing from the previous forecast of 6,100 points to 6,600 points.
The 12-month return rate forecast remains at +11%, corresponding to an index point reaching 6,900 points.
Driving factors include enhanced expectations for interest rate cuts: Goldman Sachs expects the Federal Reserve to initiate a rate-cutting cycle in September 2025, potentially cutting rates by 25 basis points three times in a row, which would improve market liquidity and increase risk appetite.
Strengthening fundamentals of large-cap stocks: Large companies in sectors such as technology (e.g., Meta, Nvidia) are experiencing solid earnings growth and possess strong pricing power, enabling them to withstand cost pressures and support overall index performance.
Improvement in the macroeconomic environment: The probability of a U.S. recession has decreased to 35%, inflation is slowing (core PCE inflation expectations have dropped to 2.3%), and easing trade tensions provide support for the stock market.
This adjustment reflects Goldman Sachs' optimistic assessment of policy shifts and corporate earnings, emphasizing the short-term effects of interest rate cuts compared to the May forecast (such as a 12-month target of 6,500 points)
