Goldman Lifts S&P 500, China GDP Forecasts After Tariffs

Goldman Sachs has increased its economic growth forecasts for both China and the US after a larger-than-expected reduction in US tariffs on Chinese goods. The bank now projects China's GDP will grow 4.6% this year, up from its previous 4% estimate but still below Beijing’s 5% target. For the US, Goldman has raised its S&P 500 target to 6,500 over the next 12 months, supported by stronger economic data and improved market sentiment following the tariff agreement. Earnings growth forecasts have also been upgraded. Despite renewed optimism, Goldman warns that high equity valuations and persistent uncertainty about future economic and earnings growth may restrain additional market gains. The bank notes that tariffs are still expected to increase in 2025 and advises investors to focus on companies with strong pricing power.