Goldman Sachs Predicts S&P 500 to Rise Over the Next 10 Years

Goldman Sachs strategists have projected that the S&P 500 will reach 7,600 by the end of 2026, representing an 11% increase from its current level.

Furthermore, the global equity strategist team led by Peter Oppenheimer has forecasted a 6.5% annualized return for the S&P 500 over the next decade, slightly below the 7.7% return predicted for global equities.

This forecast, although positive, falls in the 27th percentile of returns since 1990, indicating moderate growth expectations.

Goldman Sachs’ outlook includes a range of scenarios, with the S&P 500’s return potentially ranging from 3% to 10% over the next 10 years.

The projected 6.5% return is based on components like 6% annualized earnings per share growth, a 1% annualized decline in valuations, and a 1.4% average dividend yield.

Goldman Sachs’ forecast also considers corporate revenue growth aligned with nominal GDP growth and a potential boost in revenue from a modest weakening of the U.S. dollar.

The strategists highlight that the S&P 500’s net profit margin is currently at record highs of 13%, up from 5% in 1990. However, they do not anticipate the same level of profit growth moving forward.

In terms of valuation, Goldman’s forecast factors in long-term projections for interest rates, inflation, and a nominal Treasury yield of 4.5% in 2035. This translates to a forward price-to-earnings multiple of 21 times in 10 years, a 10% decrease from the current multiple of 23 times.

Oppenheimer and his team suggest that unless there is a significant increase in interest rates or a sharp decline in corporate profitability, U.S. equity valuations are likely to remain above long-term averages.

One major concern in their long-term forecast is the concentration of equity among the largest U.S. companies, which have been driving up multiples and returns. The team emphasizes that the future performance of these companies will significantly impact overall market returns.

Mark Newton, head of technical strategy at Fundstrat, has observed a bullish breakout in commodity prices, signaling a positive trend for commodities into 2026. He anticipates continued growth in commodities, particularly in energy, soybeans, corn, and coffee.