Goldman Sachs: S&P 500 Index expected to rise 11% in the next 12 months

On July 8, according to Jinshi Data, Goldman Sachs raised its target for the S&P 500 index again in less than two months. Goldman Sachs strategists, led by David Kostin, wrote in a report: "The Federal Reserve's earlier and deeper implementation of easing policies than expected, bond yields lower than our previous expectations, continued strong fundamentals of large stocks, and investors' willingness to ignore potential short-term earnings weakness all support our upward revision of the S&P 500 index's forward price-to-earnings ratio from 20.4x to 22x. The 3-month, 6-month, and 12-month return expectations for the S&P 500 index have been raised to +3%, +6%, and +11%, respectively, with new target levels of 6,400 points, 6,600 points, and 6,900 points, compared to previous forecasts of 5,900 points, 6,100 points, and 6,500 points." Strategists maintained their forecast of a 7% increase in earnings per share for the S&P 500 index in both 2025 and 2026, but believe that this forecast faces two-way risks. The key downside factor for earnings per share forecasts is the ultimate level of tariffs and their impact on corporate profits. Although narrowing breadth often portends a greater-than-average risk of decline, the bank's analysts believe that 'chasing gains' is more likely than 'chasing losses' and expect the market rally to broaden in the coming months, overweighting software and services, materials, utilities, media and entertainment, and real estate. [Deep Tide TechFlow]