Potential Tariffs from the Trump Administration Could End the Rally in the Stock Market, According to Goldman Sachs
Goldman Sachs strategist David Kostin has expressed concerns that tariffs imposed by the Trump administration could put an end to the rally in the stock market. “Tariffs are a risk to our equity market prognosis” Kostin said in an interview with Capital, a financial magazine. Currently, Kostin predicts that the S&P 500 index will reach 6,500 points by the end of the year, a gain of 8% from its current level.
However, the exact impact of tariffs on the US economy and the stock market is difficult to predict, according to Kostin. “Tariffs could increase the costs for companies” he said. If a company decides not to pass the increased costs on to consumers, but instead absorbs the higher costs, it could affect their profit margins and growth. On the other hand, companies might choose to raise their prices, which could have an inflationary effect. A higher inflation rate could lead to higher interest rates and, in turn, lower stock prices.
If the S&P 500 index does reach 6,500 points, it would likely mark the end of the current rally in the stock market. “There are still the seven glories, the optimism about the economy for Donald Trump and also the development of artificial intelligence” Kostin said. “But in my opinion, it is unlikely that the high annual returns of 20% or more seen in the past two years will be repeated in 2025.