Goldman Sachs: 11% gains likely in US stock market within 1 year

Goldman Sachs raised its outlook for future returns on the S&P 500 index, supported by expectations of US interest rate cuts and the continued strong performance of mega-cap stocks.

Analysts at the US investment bank now expect the index to rise by 3% over the next three months, 6% over six months, and up to 11% within a year, Reuters reported, citing a research note published today, July 8.

Their new targets are 6,400 points in the near term, 6,600 points by the end of 2025, and 6,900 points over the next 12 months.

Recent inflation data and business surveys showed that the impact of tariffs has so far been limited. Large corporations hold sufficient inventories to absorb the gradual effect of the anticipated tariff hikes.

While analysts maintained their forecast for S&P 500 earnings-per-share growth at 7% for both 2025 and 2026, they raised their forward price-to-earnings (P/E) ratio estimate for the index to 22 times, up from a previous estimate of 20.4x, citing expectations of lower interest rates.

Wall Street closed at record highs last week, buoyed by economic indicators showing continued strength in the US labor market, which helped ease investor concerns over a potential recession.