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Goldman Sachs (NYSE:GS) is dialing back its expectations for the S&P 500, cutting its year-end target to 6,200 from 6,500. The firm points to rising market uncertainty, higher tariffs, and struggles among big-name tech stocks as the main reasons for the downgrade.
Analysts explained that the revision comes from a 4% drop in their fair-value price-to-earnings multiple, now set at 20.6x instead of 21.5x. Weaker GDP growth forecasts, increased tariffs, and a greater equity risk premium have all contributed to their more cautious outlook.
One of the biggest drags on the market? The Magnificent Seven stocks. Over the past three weeks, the S&P 500 has dropped 9% from its record high, with more than half of that decline tied to a sharp selloff in these stocks. So far this year, Meta Platforms (NASDAQ:META) remains the only stock in the group trading higher, while Microsoft (NASDAQ:MSFT), Amazon (NASDAQ:AMZN), Apple (AAPL), Alphabet (NASDAQ:GOOG), Nvidia (NASDAQ:NVDA), and Tesla (NASDAQ:TSLA) have all taken a hit with Tesla seeing the steepest decline.
This article first appeared on GuruFocus.