Bullish sentiment heats up! Goldman Sachs and Bank of America raise their S&P 500 target, with the highest target being 6900 points.

Wall Street's bullish sentiment on the S&P 500 index is rising, with Goldman Sachs and Bank of America both raising their target levels for the index. The reasons for this are large listed companies showing strong performance, bond yields decreasing, and the Federal Reserve's accommodative policy coming earlier than expected. Goldman Sachs currently forecasts the S&P 500 index to rise to 6600 points by the end of the year and to reach 6900 points within 12 months, up by 6% and 11% respectively from previous forecasts. This is the second time in two months that Goldman Sachs has raised its expectations, and the fourth time this year that the target for the S&P 500 index has been adjusted, reflecting the challenges faced by Wall Street strategists in a period of tariff uncertainty. Bank of America has raised its year-end target for the S&P 500 index to 6300 points and its 12-month target to 6600 points. The reason for this is that despite ongoing policy uncertainty and high sovereign bond yields, American companies have shown strong adaptability. Analyst Savita Subramanian from Bank of America stated: "Corporate transparency remains intact. Most companies continue to announce profit expectations, and the estimate dispersion (an indicator of earnings uncertainty) is close to the low point post-COVID-19. Since the pandemic, fluctuations in exchange rates, inflation, and interest rates have not affected the profit margins of the S&P 500 index componentscompanies have either adjusted or exited the index." Goldman Sachs still forecasts a 7% increase in earnings per share for S&P 500 index components in 2025 and 2026, but also warns that there are risks to their forecasts. Analyst David Kostin from Goldman Sachs stated: "The evolving tariff situation has brought significant uncertainty to our profit forecasts. Our earnings forecast for 2025 is largely in line with the market's expectations, but our earnings forecast for 2026 is below the market's expectations. The main downside risk to our earnings per share forecast is the final tariff level and its impact on corporate profits." Bank of America expects limited upside in the stock market in the short term and believes that the index will consolidate in the third quarter due to conflicting signals on profits and the lack of catalysts for interest rates in the short term. Subramanian said: "Remember, stock price returns are only half the storydividends may play a larger role in the future. During periods of zero interest rates, dividend growth lags behind earnings growth, reducing the importance of cash returns." Goldman Sachs expects some rotation within the index after narrow gains recently. Kostin added: "Although narrow trading ranges usually indicate the possibility of significant declines below the average level, we believe that the likelihood of a 'rebound' is greater than a 'decline', and we expect market rebounds to expand in the coming months." In the beginning of the second half of the year, Goldman Sachs also gave three investment recommendations: - Balance industry allocations, focusing on increasing holdings in industries such as software and services, materials, utilities, media and entertainment, and real estate. - Alternative asset management companies, despite improvements in capital market activities, their performance still lags behind. - Companies with high-floating rate debt, as their profit expectations have improved due to the decrease in bond yields.