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Goldman Sachs increases S&P 500 forecast: upward course ahead!
Goldman Sachs lifts his S&P 500 forecasts and expects 2-8% return in the next 12 months through FED interest rate reductions.
Goldman Sachs increases S&P 500 forecast: upward course ahead!
Goldman Sachs recently significantly increased its forecasts for the S&P 500. Under the direction of David Kostin, the investment bank expects a return of 2% in the next three months, 5% in six months and 8% within one year. This assessment implies index stands of 6.800, 7,000 and 7,200 points, while the S&P 500 is currently being traded at 6.648,46 points. This optimistic view is influenced by the reaction of the Federal Reserve to the economic conditions.
Last week, the Federal Open Market Committee (FOMC) lowered the key interest rate by 25 basis points, which offers the market an additional incentive. Kostin refers to historical patterns and emphasizes that the S&P 500 in the past 40 years achieved a median 12-month return of 15% when the FED lowered interest rates and the economic growth remained stable. Traders assume that further interest rate cuts in the remaining two FOMC meetings of the year can be expected.
Corporate profits as a driver
Kostin emphasizes that the company gains have identified most of the 13%profits of the S&P 500 in the current year. These results indicate that the company gains will continue to remain the main driver for the development of stock prices. A slight positioning of investors could also increase the tactical upward potential for stocks if the macroeconomic environment remains beneficial.
The sentiment indicator is currently at -0.3 for the positioning of equity investors, which indicates a pessimistic market mood. This mixing situation could cause investors to rethink positions and possibly invest in an upward trend.
Surrounding factors such as geopolitical developments and other business news could also influence the markets. The next steps of the Federal Reserve and the reactions of the markets to these decisions will be crucial to observe developments in the final quarter of 2025. However, Goldman Sachs' assessment shows that there are both challenges and opportunities that could help investors move more safely in the current economic climate.