Investment bank Goldman Sachs (GS) has become the first Wall Street firm to lower its year-end target on the benchmark S&P 500 index as the selloff in U.S. stocks worsens.
Goldman Sachs cut its year-end S&P 500 target to 6,200 from 6,500. If the new target proves accurate, it would represent only a 5% gain for the leading index.
While several other Wall Street banks and brokerages have issued caution on U.S. equities, and lowered their forecasts for U.S. economic growth, none have cut their outlooks for the stock market until now.
U.S. markets have been roiled by the Trump administration’s tariffs on imports from China, Canada and Mexico, as well as signs that the U.S. economy is slowing down.
The S&P 500 is down nearly 8% in the past month and nearly 10% below a record high set in February of this year.
The S&P 500 is currently near a correction, defined as a decline of 10% or more from recent highs.
Leading the way lower have been technology stocks, notably the “Magnificent Seven” that includes Nvidia (NVDA), Apple (AAPL) and Microsoft (MSFT), among others.
In downgrading the S&P 500 outlook, Goldman Sachs Chief U.S. Equity Strategist David Kostin remarked in a note that the Magnificent Seven has turned into the “Maleficent 7,” noting that, as a group, the technology stocks have declined 14% over the past month.
Given the current uncertainty and decline in technology stocks, Kostin advises investors to buy stocks that are “insulated from ongoing market volatility.”
His top picks include Bank of New York Mellon (BK), Gilead Sciences (GILD), Domino’s Pizza (DPZ), and Waste Management (WM).
The stock of Goldman Sachs has declined 18% over the last month to trade at $531.43 U.S. per share.
