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S&P 500 Could Soar 12% By Year-End—But Only If Recession Is Avoided, Goldman Sachs Says

After slipping into a technical correction this month, the S&P 500 may be on the cusp of a powerful rebound that could drive it to new all-time highs, provided the U.S. economy avoids a recession, as historical patterns suggest.

In a note shared Friday titled "Where To Invest Now", Goldman Sachs chief U.S. equity strategist David J. Kostin said the S&P 500 index, as tracked by the SPDR S&P 500 ETF Trust (NYSE:SPY), could climb to 6,200 points by the end of 2025.

That’s a 12% increase from current levels of around 5,675, provided the U.S. economy manages to sidestep a downturn.

The Big ‘If’

"If the economy avoids a recession, 12-month forward return averages 12%," Kostin said, showing that historical data supports this conditional optimism.

Looking back to 1950, history shows that when the S&P 500 falls 10% and the U.S. economy sidesteps a recession, the index typically rebounds with a 12% gain over the following year.

If the window shortens to six months, the index typically returns about 8%.

Economists at Goldman Sachs and elsewhere are forecasting a gradual deceleration in growth. GDP is projected to slow from 2.8% in 2024 to between 2.0% and 2.2% in 2025, according to Goldman estimates.

The Federal Reserve ...