Goldman Sachs has revised its return forecasts for the S&P 500, projecting a 3% gain over the next three months and an 11% gain over the next year, targeting index levels of 6,400 and 6,900, respectively. This positive outlook is driven by expectations of U.S. interest rate cuts and the continued strength of large-cap stocks. The bank's analysts have adjusted their forward price-to-earnings forecast for the index to 22 times, up from 20.4 times, indicating a bullish sentiment towards the market despite potential near-term earnings weaknesses.

The S&P 500 index has recently reached record highs, supported by a resilient labor market and easing investor fears regarding a slowing economy. Following a selloff in April due to tariff announcements, stocks have rebounded as hopes for trade deals and Federal Reserve rate cuts have emerged. Goldman Sachs maintains its earnings-per-share growth forecast for the S&P 500 at +7% for both 2025 and 2026, although it acknowledges risks on both sides of this estimate.