Goldman Sachs Turns Bullish on S&P 500 Amid Fed Rate Cut Expectations

Goldman Sachs has raised its return projections for the S&P 500, citing anticipated Federal Reserve rate cuts and robust tech sector performance as key drivers. The bank now forecasts a 3% three-month return, 6% over six months, and 11% within twelve months, targeting index levels of 6,400, 6,600, and 6,900 respectively.

Fed easing is expected to begin in September, with large-cap tech companies likely to outperform. Recent corporate surveys and inflation data suggest limited consumer impact from tariffs, though analysts caution effects could unfold gradually. Earnings-per-share growth is projected at 7% for 2025 and 2026, pending Q2 results.

Risks remain despite slowing PCE inflation and reduced recession odds. Higher corporate earnings, easing trade tensions, and rate cuts are seen as primary catalysts for market gains.