Goldman Sachs predicts the S&P 500 index will climb to 6,500 by the end of 2025, mirroring a similar forecast from Morgan Stanley. This growth is attributed to the continued expansion of the U.S. economy and robust corporate earnings.
The target suggests a potential upside of 10.3% from the index’s recent close of 5,893.62. Goldman estimates corporate earnings will grow by 11% in 2025, alongside a 2.5% increase in real U.S. GDP.
The brokerage highlighted the “Magnificent 7” stocks — Amazon, Apple, Alphabet, Meta Platforms, Microsoft, Nvidia, and Tesla — as key drivers of the index’s performance. However, their outperformance over the rest of the S&P 500 companies is expected to narrow to 7 percentage points, the slimmest margin in seven years.
“While the micro earnings story supports the Magnificent 7, macro factors like trade policy and economic growth may favor the broader S&P 493,” Goldman noted.
Goldman also pointed to potential risks for the U.S. equity market, including higher bond yields and the possibility of new tariffs under President Trump’s administration, which may spur inflation and limit the Federal Reserve’s ability to cut rates further.
On the flip side, a more dovish Fed or favorable fiscal policies could present upside risks. Goldman projects the S&P 500 earnings-per-share will reach $268 in 2025, underscoring optimism despite looming uncertainties.