Goldman Sachs Boosts S&P 500 Target 2.04% to 6,800 Points

Goldman Sachs, a prominent investment bank on Wall Street, has raised its annual target for the S&P 500 index from 6,600 points to 6,800 points. This adjustment reflects a 2.04% increase from the index's latest closing price of 6,664.36 points, which was recorded on September 19. The bank's decision is based on the dovish stance of the Federal Reserve and the robust performance of corporate earnings.

The Federal Reserve, in its recent meeting, lowered interest rates for the first time since December 2023. This move was driven by an increase in the unemployment rate and signs of weakness in the labor market. The Federal Reserve has indicated that it may further reduce interest rates during its October and December meetings. Goldman Sachs analysts had previously predicted that the Federal Reserve would lower interest rates by 25 basis points during these meetings, aligning with the expectations of most major brokerages.

Earlier this year, several major brokerages had lowered their target for the S&P 500 index to below 6,000 points. This adjustment came in response to heightened concerns about an economic recession following the implementation of tariff policies by the U.S. president in April. However, recent reductions in tariffs and expectations of a more accommodative monetary policy by the Federal Reserve have eased investor concerns, lowering the risk of a recession and driving the stock market to new highs.

In addition to Goldman Sachs, other major banks such as Wells Fargo, Barclays, and Deutsche Bank have also raised their targets for the S&P 500 index this month. These banks have cited flexible earnings and the surging investment cycle in artificial intelligence as the pillars for the next round of market gains. Deutsche Bank has set the most optimistic target, raising its 2025 forecast for the index from 6,550 points to 7,000 points. Wells Fargo's stock strategist has set the year-end target for the S&P 500 index at 6,650 points, with a projection of 7,200 points by the end of 2026. Barclays analysts have raised their 2025 forecast from 6,050 points to 6,450 points.