Goldman Sachs Slashes S&P 500 Forecasts Again Amid Tariff Tensions

After a flurry of soft economic data, US stocks closed out last week with a 2% drop as investors reevaluate their assumptions about the economy. Cracks in certain areas, like the credit market, signal that Wall Street is officially in “growth scare” mode. In a note published yesterday evening, Goldman Sachs officially slashed its S&P 500 forecasts for the second time this month, citing higher tariffs and growing recession risks. The bank now expects the index to dip to 5,300 over the next three months, before rebounding to 5,700 by year-end and 5,900 in 12 months.

The new year-end target marks a sharp downgrade from the earlier 6,200 and stands just 2% above where the index closed on Friday, putting it among the lowest forecasts on Wall Street, per Bloomberg. Goldman now assigns a 35% chance of a US recession over the next 12 months — up from the previous 20% — warning that if history repeats, stocks could fall another 17% from current levels, down to ~4,600. Event contract platforms like Kalshi now predict a 42% chance of a US recession this year, up from ~18% in mid-January.

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