Stock market upset in U.S.: Goldman Sachs reduces S&P 500 forecast once more
Can we really expect growth in US stocks by 2025? Goldman Sachs isn't so optimistic, slashing their S&P 500 price target again.
The US stock market is seemingly in a slump, leaving investors scratching their heads. Just a few years back, these stocks were the driving force on international exchanges. But with geopolitical uncertainties, trade wars, and escalating AI competition from China, the American market is feeling the heat.
The S&P 500, representing the 500 largest US listed companies, has taken a dip, losing around five percent since the beginning of the year. Goldman Sachs has once more trimmed their price target for the US benchmark index, as reported by "Bloomberg." In March, they slashed their year-end estimation from 6,500 to 6,200 points, largely due to faltering tech stocks. Now, the revision is even more harsh: the new price target now stands at just 5,700 points, a mere two percent gain annually from the current level.
Goldman Sachs: Recession risks and tariff anxieties leading the way
Goldman Sachs flags the increased risk of a US recession and lingering uncertainties about new or existing trade tariffs as significant burdens.
David Kostin, US chief strategist at Goldman Sachs, sounds the alarm: "We continue to recommend that investors look for improvements in growth prospects, stronger market price asymmetries, or weaker positioning before trying to capture a market low."
Other market wizards hold the same gloomy view. Michael Wilson, chief strategist at Morgan Stanley, initially showed a glimmer of hope and hinted that the worst may be behind us. However, on Monday he cooled expectations: economic risks could hinder the S&P 500's upward spiral. The latest announcements about bilateral tariffs might offer more transparency about affected products and countries, but Wilson views this more as the beginning of further negotiations than a consistent trend reversal.
Wrapping Up
The exchange floor buzzes with tension, and Goldman Sachs' predictions serve as a clear wake-up call. The investment landscape is tricky, littered with potential pitfalls; those already in US stocks or considering an entry should keep a sharp eye on economic developments and geopolitical risks. And forget about a swift market recovery anytime soon.
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- 2025: A pause year for the S&P 500 with likely single-digit gains, roiled by volatility, according to Morgan Stanley. Meanwhile, market veterans at BlackRock spot underlying business fundamentals remaining healthy, trading at roughly an 8% discount to fair value, offering selective buying opportunities, especially in value and energy sectors.
- The S&P 500, representing major American companies, has been affected by the increased risk of a US recession and uncertainties about trade tariffs, as indicated by Goldman Sachs.
- American investors should be cautious, as the investment landscape is challenging and potentially filled with pitfalls, such as geopolitical risks and an uncertain recovery in the stock-market.
- In contrast to Goldman Sachs' pessimistic outlook, BlackRock market veterans see healthy underlying business fundamentals in the S&P 500, suggesting that there may be selective buying opportunities, particularly in value and energy sectors.
- With potential economic volatility and single-digit gains predicted for the S&P 500 in 2025 by Morgan Stanley, investors should stay informed about the global financial market landscape and be prepared for continuous economic developments.
