Goldman Sachs Adjusts Stock Market Outlook

In a significant move, Goldman Sachs, a leading U.S. investment bank, has revised its stock market outlook downward for the year. This adjustment comes as global markets react to the uncertainty surrounding President Donald Trump’s tariff policies.

New S&P 500 Target Set at 5,700

Goldman Sachs has now set a year-end target of 5,700 for the S&P 500 index, a notable decrease from its earlier forecasts. This revision places Goldman’s expectations among the most conservative on Wall Street, signaling a cautious stance on the market’s growth potential.

Economic Slowdown and Tariff Risks

The bank cites increased risks of an economic slowdown and the unpredictable nature of U.S. tariff policies as key factors behind its revised outlook. "The equity risk premium is rising, and valuations are dropping," Goldman Sachs noted, highlighting the potential for further declines if economic conditions worsen.

Revised GDP Growth and Fed Rate Cut Expectations

Alongside its stock market forecast, Goldman Sachs has also adjusted its 2025 U.S. GDP growth forecast downward by 0.5 percentage points to 1%. Additionally, the bank now anticipates three Federal Reserve rate cuts this year, up from its previous expectation of two, in response to the economic risks posed by ongoing tariff tensions.