Goldman, Peers Lift S&P 500, GDP After Tariffs

Goldman Sachs and other major brokerages have raised their S&P 500 targets and revised down U.S. recession risks following a mutual agreement between the U.S. and China to significantly reduce tariffs on each other's imports for 90 days. The U.S. tariff on Chinese goods will drop to 30% from 145%, while China's tariff on American imports will fall to 10% from 125%, leading to increased optimism in global markets. Goldman now expects the S&P 500 to reach 5,900 in three months and 6,500 over the next year, and has lifted its U.S. GDP growth forecast for 2025 to 1% while lowering its 12-month recession odds to 35%. Similar forecast improvements have been made for China, though both countries' growth projections remain below official targets. Other banks, including Barclays and J.P. Morgan, have also reduced recession odds and anticipate only one Federal Reserve rate cut in December 2025. Despite renewed market optimism, Goldman warns that high equity valuations and residual tariff levels may limit further market gains.