Goldman’s Kostin sees S&P 500 rising to 6900 over next 12 months
The S&P 500 continued to advance last week as the second-quarter earnings season delivered a strong start, with 61% of companies beating estimates by more than one standard deviation—well above the historical average of 48%, according to Goldman Sachs, News.az reports citing BBC.
The Wall Street bank maintains its bullish outlook and now forecasts the index will climb 10% to 6900 over the next 12 months, supported by resilient earnings and investor focus on 2026 growth.
Despite headline risks from new tariff announcements, equity markets have largely shrugged off trade concerns.
David J. Kostin, Goldman’s chief U.S. equity strategist, said that “investors appear to be looking through potential near-term economic and earnings weakness and focusing instead on the prospect for robust growth in 2026.”
Breadth in earnings revisions has reached its highest level since 2022, led by sectors such as Information Technology, Financials, and Communication Services.
“The outperformance of cyclical industries suggests the equity market is pricing an outlook for solid GDP growth despite consensus expectations for sluggish growth in coming quarters,” Kostin added in a recent note.
One tailwind supporting earnings is the weakening U.S. dollar. The trade-weighted dollar has fallen 7% year-to-date, and Goldman’s FX team sees a further 4% decline by year-end.
“In our macro model, a 10% decline in the dollar is associated with a boost of roughly 2-3% to S&P 500 EPS, all else equal,” the note said.
This environment favors firms with greater international exposure. The Nasdaq 100, which derives 45% of its revenues from outside the U.S., has benefited more than small caps, with the Russell 2000 generating only 20% abroad.
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