Wall Street strategists are once again growing more bullish on the outlook for the S&P 500 (^GSPC) this year as a 90-day truce between the US and China on tariffs has sparked a market rally.
On Monday night, Goldman Sachs raised its year-end target for the S&P 500 to 6,100 from a prior forecast of 5,900. Meanwhile, Yardeni Research boosted its year-end projection to 6,500, up from a previous call for 6,000. Yardeni’s more bullish target of 6,500 reflects a roughly 11% additional gain from current levels for the benchmark index. Both firms mentioned diminishing fears of a major growth slowdown as a key reason stocks will continue to move higher.
“We raise our S&P 500 return and earnings forecasts to incorporate lower tariff rates, better economic growth, and less recession risk than we previously expected,” Goldman Sachs chief US equity strategist David Kostin wrote in a note to clients.
“Among our main concerns about Trump’s Tariff Turmoil was that the drop in stock prices would have a significant negative wealth effect on consumers,” Yardeni Research president Ed Yardeni wrote. “After [Monday’s] stock market rally, the negative wealth effect is probably insignificant.”