Goldman Sees Room for S&P 500 Gains if Pressure Eases

A slowdown in rising fuel prices and Treasury yields could help extend the stock market’s gains, but that relief is far from certain. The S&P 500 is near record highs despite elevated oil prices and bond yields.

Goldman Sachs strategist Ben Snider said the median S&P 500 stock is 16% below its 52-week high. He said market breadth, a measure of how widely stocks are participating in a rally, has fallen to its lowest level since the dot-com bubble.

Snider said reduced economic uncertainty could help lagging stocks catch up. The index has remained resilient, supported by AI optimism and expectations for strong corporate earnings.

Analysts project S&P 500 companies’ combined third-quarter earnings will grow nearly 29% from a year earlier. The return of the “Magnificent Seven” trade has also lifted names including Meta and Nvidia, while McDonald’s, PepsiCo, Lowe’s and Nike are near 52-week lows.

Snider expects improved market breadth to support the S&P 500 over the next 12 months. He forecasts the index will rise 13% to 8,700 over that period.