The rally that propelled the S&P 500 to record highs is fading, leading Goldman Sachs to lower its year-end target for the index and dub the once-dominant Magnificent Seven stocks the “Maleficent Seven.”
Chief U.S. equity strategist David J. Kostin said the revision reflects a weaker economic growth outlook, higher trade tariffs and a more uncertain policy environment – factors that are now pressuring corporate earnings and equity valuations.
In a note shared Monday, Kostin’s team lowered the S&P 500’s year-end target from 6,700 to 6,200 points. “The proximate causes of the market decline are the jump in policy uncertainty largely related to tariffs, concerns about the economic growth outlook, and a positioning unwind, especially among hedge funds.”
Despite the revision, the new target still implies an 11% upside from current levels, though the market will need clearer catalysts for a sustained rally.
Why Goldman Sachs Is Cutting Its Forecast
One of the biggest drivers of Goldman’s revision is …