2026 will be another positive year for the stock market, according to Goldman Sachs. On Friday, the firm set its 2026 S&P 500 (SPX) price target at 7,600, implying upside of 10% from Thursday’s close.
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Goldman Chief U.S. equity strategist Ben Snider expects AI productivity gains to provide a tailwind to earnings and forecasts the benchmark index to grow its EPS by 12% to $305. Snider expects Big Tech to drive a majority of the earnings growth, although he also expects broader participation from the rest of the index.
Goldman Warns on Profit Margins and Slower Easing Cycle
However, Goldman notes that risks to the S&P 500 include a slow interest rate easing cycle and lower profit margins. On Wednesday, the Fed voted 9-3 to cut rates by 25 bps, although two officials dissented in favor of an unchanged rate, while Fed Governor Stephen Miran called for a 50 bps reduction. The number of dissents was the largest since 2019, reflecting a split central bank and casting doubt on accelerated rate cuts.
Besides tech, Goldman also expects strong earnings growth from the industrials, materials, and utilities sectors. In recent days, the market has been experiencing a shift from growth to value, with the Dow Jones (DJIA) up by 1.4% during the past week and the Nasdaq 100 (NDX) down by 1.6%.
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