Goldman Sachs and Morgan Stanley's Optimistic Forecast for S&P 500

Goldman Sachs has forecasted that the S&P 500 index will reach 6,500 by the end of 2025, backed by U.S. economic growth and corporate earnings. Alongside Morgan Stanley, Goldman projects risk from tariffs and higher bond yields but expects corporate earnings to grow and the Federal Reserve to cut interest rates.

Goldman Sachs has projected that the S&P 500 index will ascend to 6,500 by the close of 2025, aligning with Morgan Stanley’s optimistic outlook. This prediction is fueled by sustained growth in the U.S. economy and corporate earnings performance.

The Wall Street firm’s target signifies a 10.3% increase from the index's previous close of 5,893.62. Recently, Morgan Stanley mirrored this forecast, predicting that positive trends in U.S. earnings growth will persist into 2025, with interest rate cuts by the Federal Reserve and improved business cycle indicators.

Goldman highlighted that the 'Magnificent 7' stocks, which include tech giants like Amazon, Apple, and Microsoft, are set to outperform other companies in the index in the upcoming year, albeit by a slightly narrower margin compared to previous years. Despite potential risks arising from tariffs and higher bond yields, Goldman foresees an 11% rise in corporate earnings and a U.S. GDP growth of 2.5% in 2025.

(With inputs from agencies.)