Goldman Sachs Says U.S Market will rise 9% over the next year:David Kostin, Goldman Sachs’ chief U.S. equity strategist, shared his perspective on the market’s recent performance and the factors influencing its direction. While short-term concerns about tariffs remain, he noted that optimism for a favorable resolution is helping sustain investor confidence. Looking ahead, he expects the market to rise by around 9-10% over the next year, including dividends. However, he acknowledged that after a strong rebound since early April, some volatility could emerge due to lingering trade uncertainties.
Goldman Sachs Says U.S Market will rise 9% over the next year
David Kostin, Goldman Sachs’ chief U.S. equity strategist, shared his perspective on the market’s recent performance and the factors influencing its direction. While short-term concerns about tariffs remain, he noted that optimism for a favorable resolution is helping sustain investor confidence. Looking ahead, he expects the market to rise by around 9-10% over the next year, including dividends. However, he acknowledged that after a strong rebound since early April, some volatility could emerge due to lingering trade uncertainties.
Kostin highlighted that equity markets often respond more to soft data—such as surveys and sentiment indicators—than to hard economic data. Recent soft data has shown weakness, though there are early signs of stabilization. Meanwhile, Goldman Sachs’ economics team anticipates weaker hard data in the coming months, which could temporarily dampen market sentiment.
Several near-term risks stand out in the weeks ahead. The 90-day extension on delayed U.S.-China tariffs expires in early August, leaving limited time for a resolution. Earnings season, starting July 11, will be closely watched for insights into how companies are handling margin pressures amid potential tariff impacts. Additionally, the share buyback blackout period ends in late June or early July, which could provide some support for stocks as corporate repurchases resume.
Despite these uncertainties, Kostin emphasized that Goldman Sachs does not foresee a recession. Instead, the base case expects continued economic growth, with corporate earnings projected to rise by about 7% this year and another 7% in 2025. This outlook supports a longer-term market target of roughly 3,100 for the S&P 500, suggesting nearly 10% upside from current levels.
The conversation also touched on how tariffs might affect corporate profitability. Kostin explained that while the effective tariff rate could climb to around 16% if new tariffs take effect, companies with historically high and stable gross margins—such as Kroger, Salesforce, and IBM—may be better equipped to manage cost pressures. A key question is whether businesses will pass these costs to consumers, absorb them, or find alternative strategies, such as shifting toward private-label products.
Retailers face particular challenges, as passing tariff costs to consumers may not be feasible in today’s competitive landscape. Instead, shoppers might opt for cheaper private-label alternatives over branded goods, adding another layer of complexity for companies trying to maintain margins.
In summary, while the market navigates near-term hurdles—tariff uncertainty, earnings risks, and fluctuating economic data—the broader outlook remains constructive. Earnings growth and the absence of a recession should support gradual market gains, but investors should prepare for potential volatility in the months ahead.
Disclaimer:
The following article is based on the views of David Kostin, Goldman Sachs’ chief U.S. equity strategist, and is intended for informational purposes only. The content reflects the opinions and perspectives expressed during the original discussion and should not be construed as financial advice, investment recommendations, or an endorsement of any particular strategy.
Market conditions, economic data, and geopolitical factors are subject to change, and past performance is not indicative of future results. Readers are encouraged to conduct their own research and consult with a qualified financial professional before making any investment decisions. Neither the author nor the platform assumes any responsibility for actions taken based on the information provided.