Goldman Sachs has reduced its S&P 500 target for the second time this month, highlighting increased recession risks and uncertainties surrounding tariffs.
Led by strategist David Kostin, the team now anticipates the benchmark index to close the year at approximately 5,700 points, a significant drop from their prior estimate of 6,200. This new projection suggests a modest 2% gain from the S&P 500’s closing on Friday and is one of the most conservative forecasts on Wall Street, according to Bloomberg data.
Kostin noted in his report that the combination of slowing economic growth and escalating uncertainty justifies a heightened equity risk premium and reduced valuation multiples. If the growth prospect and investor confidence continue its downward trend, valuations could plunge well below the forecast, he cautioned.
This recent revision follows an earlier target cut from 6,500 on March 11, influenced by the downward trajectory of technology stocks this year.
U.S. equities have been under pressure due to concerns over the economic fallout from President Donald Trump’s aggressive trade policies. His pledge to impose reciprocal tariffs on “all countries” has diminished hopes that the initial set of levies to be announced on April 2 might be limited in scope.
In tandem, Goldman Sachs’ economists have revised their tariff projections upward for the second time in less than a month, now predicting an average U.S. levy increase of 15 percentage points in 2025.
Furthermore, the economists have downgraded their forecast for 2025 U.S. GDP growth by half a percentage point to 1% when measured year-over-year in the fourth quarter
