Goldman Sachs has raised its 2025 S&P 500 (SPX) price target to 6,800 from 6,600, joining a growing wave of Wall Street firms hiking their estimates. The investment bank cited a dovish Fed and strong earnings as reasons for its adjustment.
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In addition, Goldman expects the benchmark index to increase by 5% during the next six months and 8% during the next 12 months.
Goldman Calls for Three Rate Cuts in 2025
Last week, the Fed voted to cut interest rates by 25 bps, marking the first reduction since December 2024. The Fed will meet again in October and December, with Goldman predicting a rate cut at each meeting.
“The S&P 500 has typically generated positive returns in Fed cutting cycles during which the economy continued to grow and avoided a recession,” said Goldman Sachs chief U.S. equity strategist David Kostin.
CME’s FedWatch tool shows 77% odds that rates will be between 3.50% and 3.75% after the Fed’s December meeting, matching Goldman’s call for three cuts.
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