Goldman Sachs joins the ranks of bearish on US stocks, lowering year-end target level of the S&P 500 index.

Goldman Sachs Group, Inc. strategist downgraded the year-end target of the S&P 500 index from 6500 points to 6200 points, citing increased policy uncertainty, especially regarding tariffs, and concerns about economic growth prospects. The downgrade of the target by Goldman Sachs Group, Inc. further indicates growing skepticism about the outlook for the world's largest economy. Strategists including David Kostin and Jenny Ma wrote in a report on Tuesday, "Our revised forecast reflects our U.S. economic team's recent downgrade of GDP growth forecasts, higher assumed tariff rates, and higher levels of uncertainty typically associated with higher stock risk premiums." The forecast downgrade also considered the decline of tech giants' stocks. They stated that the significant decline in the index was largely driven by a 14% drop in the so-called tech giants' stocks, with their price-to-earnings ratios dropping from 30 times to 26 times. With political uncertainty increasing amidst the GEO Group Inc, more and more Wall Street banks are expressing concerns about economic growth, including Goldman Sachs Group, Inc. Citigroup and HSBC analysts also downgraded their views on the U.S. stock market this week, citing concerns about the economy and pointing out better opportunities elsewhere. Market forecasters from banks like JPMorgan Chase and Royal Bank of Canada Capital Markets have also lowered their bullish expectations for the U.S. stock market in 2025. As concerns about an economic recession intensify, fluctuating trade policies by President Trump and ongoing government layoffs have led to a decline in consumer and business confidence indices. This uncertainty has depressed the S&P 500 index by over 9% from its peak in February, and the tech-heavy NASDAQ 100 index has also experienced a significant correction. Additionally, a previous report from Goldman Sachs Group, Inc. indicated that recession concerns topped the list of "avalanche" factors in the U.S. stock market. Data from Goldman Sachs Group, Inc.'s stock sales trading department shows that hedge funds are increasing their short positions at the fastest pace since November 2024, with long-term investors selling a net $5 billion, focusing on tech, financial, and discretionary consumer sectors. Weak economic data, including nonfarm payrolls and the ISM manufacturing index, have exacerbated market concerns about an economic recession. Economists at Goldman Sachs Group, Inc. have raised the probability of a 12-month economic recession from 15% to 20%. Goldman Sachs Group, Inc. strategists have downgraded this year's earnings growth expectations from 9% to 7% and lowered their P/E ratio forecast by 4%. Kostin, one of the analysts bullish on the U.S. stock market last year, has recently warned of growth risks in the U.S. stock market. They advise investors to hold stocks that are not primarily driven by current market volatility, such as New York TrustCo Bank Corp NY (BK.US), financial information services provider S&P Global, Inc. (SPGI.US), and rating agency Moody's Corporation (MCO.US). They also suggest that market participants should consider stocks impacted by hedge fund position liquidation, such as software manufacturer Informatica (INFA.US) and music streaming service provider Spotify (SPOT.US).