Goldman Sachs strategists say there is still room for the US stock market to rise, and they expect the S&P 500 index (SP500) to reach 7,600 by the end of 2026 as corporate earnings expand and the economy continues to grow moderately.
The bank expects the earnings per share of S&P 500 index component companies to increase to around $309 in 2026 and to around $342 in 2027, which implies annual growth rates of approximately 12% and 10% respectively.
According to the latest “US Weekly Start” investment portfolio strategy report released by Goldman Sachs, these gains will support a price target, which implies a return of approximately 14% from the current level.
The outlook reflects that despite persistently high interest rates and a slightly tighter financial environment, there is still confidence that corporate profitability will continue to expand.
Technology companies remain the main driver of profit growth in the US stock market.
Goldman Sachs estimates that the information technology sector will make the largest contribution to the profits of the S&P 500 index in the coming years, with earnings per share rising from approximately $70 in 2025 to $92 in 2026 and then to $109 in 2027.
Other industries expected to make significant contributions include finance, healthcare and communication services, although their growth rates are projected to be more moderate.
Overall, strategists expect the S&P 500’s earnings growth rate to be around 12% in 2026 and approximately 10% in 2027, which is in line with the long-term expansion trend of corporate profits in the United States.
Despite the strong market rally in recent years, Goldman Sachs believes that valuations remain within historical ranges. The current price-to-earnings ratio of the S&P 500 index is approximately 21 times, close to the long-term average of the index relative to its historical distribution.
Valuations in some sectors seem to be higher than in others. The valuations of the industrial, utility and consumer staples sectors are close to the upper limit of their historical valuation ranges, while the valuation multiples of the financial sector are relatively low compared with historical levels.
This divergence indicates that as growth expectations change, investors may increasingly rotate among different industries.
The report also highlights the growing concentration in the US stock market. According to Goldman Sachs’ estimates, the top ten companies account for approximately 39% of the S&P 500’s market capitalization and about 31% of its earnings.
This concentration reflects the dominance of a few technology-driven companies that have benefited from structural trends such as artificial intelligence, cloud computing and digital infrastructure.
Meanwhile, strategists point out that market breadth remains relatively narrow, meaning that the number of stocks driving the overall index performance is still small.
Goldman Sachs economists expect the US economy to grow at a moderate pace in the coming years. The company predicts that the real GDP growth rate will be around 2.3% in 2026 and about 2.0% in 2027, which is largely in line with the general expectations. Interest rates are also expected to decline slightly, with the 10-year US Treasury yield projected to fall to around 4.1% within the next year.
Overall, even though investors remain sensitive to inflation and changes in monetary policy, these conditions may still support the stock market’s continued rise.
