Goldman Sachs strategist expects profit growth to drive the further rise of the S&P 500 index.

Goldman Sachs strategists believe that the US stock market still has room to rise, predicting that the S&P 500 index will rise to 7600 points by the end of the year, with earnings growth being the main driver. Led by Ben Snider, the team suggests that investors shift their focus towards long-term growth companies rather than cyclical companies, as current market pricing reflects economists' forecasts of "steady but below-trend" GDP growth. The strategists also added that with earnings expectations continuing to rise, US stocks have reached new highs, while valuation multiples are still below pre-war levels. They point out that investments related to artificial intelligence are surging and are expected to contribute around 40% of the earnings growth of the S&P 500 index this year, but at the same time, they are compressing valuations in certain market sectors. They emphasize that market breadth of the S&P 500 index has fallen to one of the narrowest levels since the bursting of the internet bubble.