Goldman Sachs Foresees S&P 500 Growth Despite Tariff Concerns
New York, Sunday, 29 June 2025.
Goldman Sachs predicts a bull market for the S&P 500 by year-end, citing resilient corporate earnings and potential tariff relief, despite ongoing economic challenges.
Economic Context and Current Predictions
Today, Goldman Sachs outlined a bullish outlook for the S&P 500, anticipating a target of 6,200 by the end of 2025. This optimistic projection, despite a 35% recession probability, comes as companies demonstrate significant resilience against challenging economic conditions exacerbated by tariffs [1].
The Role of Tariffs and Trade Policy
A critical component of Goldman Sachs’ analysis is the expectation of tariff relief. Thanks to recent legal victories and ongoing political negotiations, tariffs are anticipated to cap at 13%, down from a possible 18%. This potential reduction in trade barriers could offset structural difficulties such as inflation and margin erosion, making the market more appealing to investors [1].
Sectors and Companies Poised for Growth
In the face of economic uncertainty, consumer staples and healthcare firms, including Coca-Cola and Johnson & Johnson, have notably outperformed the S&P 500 by 8% year to date. Meanwhile, the ‘Magnificent 7’ tech giants have seen a decline of 14% in just three weeks. Companies with robust pricing power, such as Coca-Cola, which reported a 7% surge in 2024 Q2 organic revenue, are highlighted as key players poised to benefit despite economic headwinds [1].
Market Strategies and Future Outlook
Given the current market dynamics, Goldman Sachs advises overweighting investments in consumer staples and healthcare, while advising caution regarding discretionary tech firms, such as Meta and Apple, until trade policies and AI monetization become clearer. Furthermore, any increase in tariffs beyond 13% may lead to another earnings downgrade cycle, indicating a precarious balance between potential market growth and regulatory developments [1].