BofA Global Research and Goldman Sachs have increased their year-end projections for the S&P 500 index, citing factors such as declining policy uncertainty, strong corporate earnings, and the possibility of interest rate cuts.
Investors are also awaiting the release of the Federal Reserve’s June meeting minutes on Wednesday, which may offer further insight into when the central bank could begin easing its monetary policy.
According to a Reuters report, Bank of America raised its S&P 500 index target from 5,600 to 6,300, while Goldman Sachs increased its forecast from 6,100 to 6,600. These revisions suggest potential gains of approximately 1% and 6%, respectively, based on the index’s recent close at 6,229.28.
This is Goldman Sachs’ second upward revision in the past two months, following a previous target hike in early May.
Earlier this year, leading brokerages like Bank of America slashed their S&P 500 targets to below 6,000 after President Trump’s “Liberation Day” tariffs in April rattled markets, fuelling recession fears and sparking a global trade shake-up that triggered a stock sell-off.
But since then, some of those tariff rates have been rolled back, helping to ease investor anxiety, lower recession risks, and push stocks to new record highs just last week.
Last month, Barclays, Citigroup, and Deutsche Bank raised their S&P 500 targets. Softer U.S. economic data have also increased expectations for more Fed rate cuts, which could support equities.
“Recent inflation data and corporate surveys indicate less tariff pass-through so far than we expected,” Goldman Sachs said.
Goldman Sachs also raised its three-month and 12-month S&P 500 targets to 6400 and 6900 from 5900 and 6500, respectively.
Trump intensified his trade war Monday by announcing higher tariffs on 14 countries, including Japan and South Korea, starting August 1.
“We expect the digestion of tariffs to be a gradual process, and large-cap companies appear to have some buffer from inventories ahead of the increase in tariff rates,” Goldman Sachs added.
