US-China trade negotiations ignite optimism, Goldman Sachs predicts US stocks could rise another 11%.

Due to the easing of trade tensions between China and the United States, the "Buy America" trade has returned, prompting Goldman Sachs to raise its target for US stocks. Goldman Sachs strategists, including David Kostin, currently predict that the S&P 500 index will reach 6500 points in the next 12 months, higher than the previous estimate of 6200 points. The new forecast implies an increase of about 11% from Monday's closing price. Global two major economies negotiating representatives agreed to temporarily reduce tariffs, causing a rebound in US stocks on Monday as traders bet that the US could avoid an economic recession. However, Goldman Sachs remains cautious. Goldman Sachs strategists stated, "Optimistic expectations for economic growth, as well as uncertainties surrounding the extent to which economic and corporate profit growth will slow down, may limit price-to-earnings ratios in the coming months." S&P 500 Index Surges After Tariff Negotiations Goldman Sachs had revised its estimate for the S&P 500 index twice in March, citing rising risks of an economic recession and uncertainties related to tariffs. The strategists said that while the latest agreement alleviates these concerns, especially large technology stocks should recover, overall profit prospects are not balanced. They stated, "Despite recent improvements in growth prospects, tariff rates in 2025 may be much higher than in 2024, putting pressure on profit margins." Goldman Sachs advises investors to focus on stocks of companies that have high pricing power and can maintain profit margins even as input costs rise.