Goldman Sachs chief US equity strategist David Kostin has cut his year-end price target for the S&P 500, citing market uncertainty. The downgrade reflects a near-correction of the gauge and a more than 4% adjustment due to a diminished GDP outlook weighing on projected corporate profits.
However, despite the revised forecast, which still projects an 11% gain for the year, some argue that this downward revision can be seen as optimistic. Kostin’s previous November call at 5,900 was a 10% gain, and his current 6,200 call at 5,600 is even more bullish.
The revision comes during a period of high trade uncertainty, but it also acknowledges the S&P slide while maintaining a positive outlook. The fact that Goldman Sachs has updated its call with more information suggests that the company is taking a nuanced view of the market’s future.
Recent data on inflation and hiring has been largely favorable, reinforcing the notion that the economy remains in solid shape despite the stock market plunge sparked by Trump’s tariffs. However, some question whether December is long enough to make a correct forecast for the long-term trend.
Experts will be watching as the administration’s bigger plan comes into play, with corporate benefits expected later and stronger economic data potentially revealing itself over time. While the case for a bullish 2025 has become more modest, it remains to be seen whether this revised forecast is accurate in the face of ongoing market uncertainty.
Source: https://finance.yahoo.com/news/why-goldmans-2025-stock-market-downgrade-is-actually-bullish-100017854.html