Goldman Sachs Revises S&P 500 Forecast Upwards, Anticipates Earlier Fed Rate Cuts

Goldman Sachs analysts have significantly adjusted their S&P 500 projections following new insights into potential rate cuts by the U.S. Federal Reserve. According to Goldman Sachs Research economists, there is now a greater than 50% likelihood that the Fed will reduce rates at the September Federal Open Market Committee (FOMC) meeting, a revision that brings the expected cuts three months earlier than previously forecasted. The economists anticipate a series of 25-basis-point reductions in September, October, and December of this year, followed by additional cuts in March and June of 2026. This adjustment is attributed to emerging data suggesting that the economic impact of former President Donald Trump's tariffs has been less severe than initially feared. David Mericle, Goldman Sachs Research's chief US economist, also highlighted a tightening job market in the U.S., though he affirmed that overall labor conditions remain robust. The CME FedWatch Tool currently estimates a 62.7% probability of a 25-basis-point rate cut at the September FOMC meeting, with predictions derived from 30-day Fed Funds futures prices. In light of these developments, Goldman Sachs strategists have elevated their 12-month S&P 500 index forecast from 6,500 to 6,900, as reported by Bloomberg, alongside raising their year-end target from 6,100 to 6,600. At the time of reporting, the S&P 500 stands at 6,225.52, marking a 0.5% increase over the past five days and a 3.66% rise over the last month.