Goldman Sachs strategists predict the S&P 500 will rise 2% by the end of this year and 6% by mid-2026, driven by expected interest rate cuts from the Federal Reserve and a reacceleration of economic growth. David Kostin, a research team, said the US index typically generates positive returns during Fed rate-cutting cycles. Kostin's S&P 500 forecast is based on an expectation of 7% corporate earnings growth in 2026. Goldman Sachs economists predict the Fed will cut rates three times by 2025, with the US economy reaccelerating in 2026. The unwinding of AI deals is the most significant risk to a reversal of the stock market's upward trend, with capital expenditure growth from companies like Amazon, Meta, Microsoft, and Oracle being key.