Goldman Sachs Projects S&P 500 Rally to 7,600 Amid Historic Consumer Confidence Collapse

Key Highlights

• Goldman Sachs forecasts S&P 500 will climb 7% to reach 7,600 by year-end
• The S&P 500 has surged 12% since March 30, marking the fastest gain since April 2020
• Goldman favors growth names including Broadcom, Nvidia, and Amazon
• Gas prices have jumped nearly 40% following escalation of Iran tensions
• Consumer sentiment collapsed to 47.6, the lowest reading in the survey’s 74-year history

Goldman Sachs strategist Ben Snider forecasts the S&P 500 will advance another 7% from present levels to finish 2025 at 7,600. His optimism centers on sustained corporate profit expansion.

The benchmark index has already posted a remarkable 12% surge since the end of March. This represents the most powerful advance since April 2020, and prior to that, March 2009.

Snider observed that during 2009, 2020, and now 2025, equity markets have rebounded sharply before economic uncertainties fully resolved. He believes this historical precedent is repeating itself.

Goldman is advising clients to increase exposure to growth-oriented equities that have experienced price corrections. Snider highlighted firms connected to power grid expansion and those facing minimal threats from artificial intelligence transformation.

The investment bank’s recommended portfolio includes Broadcom, Nvidia, AMD, Amazon, Meta, and Micron. All these companies are viewed as possessing robust profit trajectories regardless of macroeconomic conditions.

Investors have broadly dismissed worries about $4-per-gallon fuel costs and elevated crude oil quotations. Market watchers indicate the primary concern centers on oil breaching $150 per barrel, a threshold not yet reached.

Tom Essaye, founder of Sevens Report Research, characterized the current market environment as favoring dip-buying strategies. He emphasized that crude oil jumping to $150–$200 per barrel would represent the critical warning sign for investors.

Consumer Sentiment Plummets to Unprecedented Lows

Simultaneously, Goldman Sachs is cautioning that American consumers face mounting financial strain. Fuel costs have escalated nearly 40% since tensions with Iran intensified.

Goldman strategist Ronnie Walker estimates this increase translates to approximately $140 billion in annualized household income erosion. Lower-income families bear the brunt disproportionately, allocating roughly four times more of their budgets to gasoline compared to high-income households.

The University of Michigan Consumer Sentiment Index plummeted to 47.6 this month. This marks an 11% decline from March and establishes the weakest reading since the survey’s inception 74 years ago, falling beneath even 2008 financial crisis depths.

Inflation expectations for the coming year jumped to 4.8%, representing the sharpest monthly increase in twelve months.

Select Consumer Companies Demonstrate Resilience

Despite macro headwinds, certain consumer-facing businesses report continued strength. PepsiCo CEO Ramon Laguarta noted that affordably-priced Frito-Lay products continue performing well, with unit volumes improving during the first quarter.

Ulta Beauty CEO Kecia Steelman reported that customers maintain spending on beauty products and store visit frequency remains stable. She noted that 95% of transactions flow through the loyalty program, with members indicating they won’t sacrifice personal care priorities.

McDonald’s stock has lagged the broader market recovery, declining 1% over the past month. Dollar General and Dollar Tree have each gained only 1% during the same timeframe.

March retail sales figures, scheduled for release Tuesday, will provide insight into consumer behavior amid escalating energy expenses last month.

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