U.S. investment bank Goldman Sachs (GS) has lowered its forecast for the benchmark S&P 500 index for the second time in a month amid growing signs of weakness in the stock market.
David Kostin, Chief U.S. Equity Strategist at Goldman Sachs, cut his year-end target for the S&P 500 index to 5,700 points, down 8% from a previous estimate issued in March of 6,200.
Kostin cited a higher recession risk and tariff-related uncertainty as the main reasons for his second downgrade of the S&P 500 in only a few weeks.
“If the growth outlook and investor confidence deteriorate even further, valuations could decline much more than we forecast,” wrote Kostin in a note to clients.
Goldman Sachs’ new target implies that the S&P 500 will likely only gain about 2% this year and is among the most bearish forecasts on Wall Street.
Kostin started the year with an S&P 500 year-end target of 6,500. He lowered that forecast to 6,200 on March 11 due to tariff uncertainties and a steady decline in technology stocks.
Stocks in the U.S. continue to selloff amid mounting fears over the impact of U.S. President Donald Trump’s trade war on the global economy.
The White House is preparing to implement reciprocal tariffs on all countries starting April 2, a development that has led investors to flee stocks for the relative safety of gold and bonds.
The S&P 500 index ended the year’s first quarter down 4% at 5,611.85.
