Goldman Sachs: Raises 12-month target for the S&P 500 index from 6500 points to 6900 points, expecting a return rate of 11%.

Goldman Sachs raised its return rate forecast for the S&P 500 index in a report released on July 8, 2025. The core reason is the expectation that the Federal Reserve will cut interest rates earlier and by a larger amount, as well as the continued strong fundamentals of large-cap stocks (especially tech giants). Specifically, the three-month return rate forecast has been raised to +3% from the previous level, corresponding to a target point of 6,400 for the S&P 500 index. The six-month return rate forecast has been raised to +6%, with the index point moving from the previous estimate of 6,100 to 6,600. The 12-month return rate forecast remains at +11%, with the index point reaching 6,900. Driving factors include strengthened rate cut expectations: Goldman Sachs expects the Federal Reserve to start a rate cut cycle in September 2025, possibly lowering rates by 25 basis points three times in a row, which will improve market liquidity and increase risk appetite. Strong fundamentals of large-cap stocks: Large companies such as tech giants (such as Meta and Nvidia) have stable profit growth, strong pricing power, and the ability to withstand cost pressures, supporting the overall index performance. Improved macroeconomic environment: The probability of a US economic recession has dropped to 35%, inflation is slowing down (with core PCE inflation expectations falling to 2.3%), and trade tensions are easing, providing support for the stock market. This adjustment reflects Goldman Sachs' optimistic assessment of policy shifts and corporate profitability. Compared to the May forecast (such as a 12-month target of 6,500 points), this time emphasizes the short-term impact of rate cuts.