(Markets Insider) Goldman Sachs strategists have trimmed the S&P 500 target to 4,900 by the end of the year, down from the previous forecast of 5,100.
The downward revision follows anticipated rate hikes by the Federal Reserve, with the strategists expecting seven rate hikes this year following hot inflation numbers.
Strategist David Kostin says higher rates combined with bond yields will weigh on stocks by making them less attractive.
The strategists opine that the macro environment is more challenging in 2022 than last year. They still expect equity prices to rise on higher earnings and hit new all-time high during the year.
In the event that inflation stays high for long and the Fed hikes rate faster than markets anticipate, Goldman says S&P could fall up to 3,900.
Investors are also cautious of the Russian and Ukrainian tensions, which could dampen the stock prices.
At 4,900 by the year end, S&P would be higher than the current 4,412, but it is only 3% higher than the price it traded at the start of the year.
S&P 500 is down -0.14%.
