S&P 500 to rise by 11% to six,500 in 2025, Goldman Sachs says

Investing.com– The S&P 500 index is anticipated to rise 11% in 2025 on sturdy earnings progress, Goldman Sachs analysts mentioned in a latest observe, though beneficial properties are anticipated to gradual after a stellar efficiency in 2024.

GS expects the S&P 500 to rise 11% to six,500 factors this yr, in comparison with a roughly 25% return in 2024. 

A bulk of the index’s returns have been pushed by 5 stocks- NVIDIA Company (NASDAQ:NVDA), Apple Inc (NASDAQ:AAPL), Amazon.com Inc (NASDAQ:AMZN), Alphabet Inc (NASDAQ:GOOGL), and Broadcom Inc (NASDAQ:AVGO), GS analysts famous, whereas the equal-weight S&P 500 rose 13% in 2024. 

GS additionally famous that the final time the S&P 500 returned back-to-back annual beneficial properties of over 20% was in 1998 and 1999, simply earlier than the Dotcom bubble crash. 

The index is anticipated to rise mainly on improved earnings, with GS forecasting EPS progress of 11% in 2025 and seven% in 2026. The ahead worth to earnings a number of can be anticipated to stay unchanged at 21.5 occasions by end-2025. 

The S&P 500 logged a sluggish begin to 2025, extending declines from December as buyers locked in some measure of earnings from 2024. Uncertainty over U.S. rates of interest and coverage underneath incoming President Donald Trump additionally pressured danger urge for food, particularly the outlook for native shares. 

The communication companies sector was the most important driver of the S&P 500 in 2024, as heavyweight expertise shares have been boosted by hype over synthetic intelligence. This pattern is anticipated to considerably gradual in 2025, as buyers search extra readability on simply how a lot AI is factoring into company earnings. 

The tech-heavy NASDAQ Composite fared higher than the S&P 500 in 2024, rising about 29%.