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Goldman Sachs revised its outlook for the S&P 500 after the U.S. and China agreed to reduce tariffs on each other's goods for a 90-day period.
The bank now expects the index to climb about 1% over the next three months to 5,900 points, up from its prior estimate of 5,700. Over the next year, Goldman projects an 11% gain to around 6,500, raising its 12-month forecast from 6,200.
The firm said the change reflects improved economic conditions and a reduced risk of recession, alongside the lower tariff rates. Under the agreement, the Trump administration will cut tariffs on Chinese imports to 30% from 145% by midweek. China is also lowering its tariffs on U.S. goods to 10% from 125%.
The S&P 500 was recently up about 0.8%, gaining roughly 4% so far this week on optimism surrounding the trade de-escalation.
Goldman added that easing trade barriers may support broader global growth, which could bolster corporate earnings into 2026.
This article first appeared on GuruFocus.