Analysts at the financial giant Goldman Sachs upgraded their S&P 500 projections amid new predictions for rate cuts from the U.S. Federal Reserve.
Goldman Sachs Research economists say there’s more than a 50% chance of the Fed cutting rates at the Federal Open Market Committee (FOMC) meeting in September, three months earlier than their previous prediction.
Goldman economists predict 25-basis-point cuts in September, October, and December, and March and June of 2026.
The upgraded forecast is due to early evidence that indicates the impact of President Donald Trump’s tariffs has been somewhat less dramatic than initially expected. David Mericle, chief US economist in Goldman Sachs Research, also notes that it has become harder to find a job in the US, though he says the labor market remains healthy overall.
The CME FedWatch Tool estimates there’s a 62.7% chance the Fed will cut the rate by 25 basis points at the FOMC meeting in September. The FedWatch Tool generates probabilities using the 30-day Fed Funds futures prices.
Due to the upgraded forecast, Goldman Sachs strategists raised their 12-month forecast for the S&P 500 index from 6,500 to 6,900, Bloomberg reports. They also increased their year-end target from 6,100 to 6,600.
The S&P 500 is trading at 6,225.52 at time of writing. The leading index is up 0.5% in the past five days and 3.66% in the past month.
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