How Trump’s Election Could Impact US Stocks

Goldman Sachs Research's projection for the S&P 500 Index remains largely consistent even after Donald Trump's victory in the presidential election. However, beneath the headline numbers, there are significant shifts in the outlook for specific sectors. According to David Kostin, chief US equity strategist at Goldman Sachs, the S&P 500 is still expected to rise approximately 9% to reach 6300 within the next 12 months. The forecast includes earnings-per-share (EPS) growth of 11% in 2025, followed by a 7% increase in 2026. Kostin notes that these estimates could be adjusted as more details about the new administration’s policy direction emerge, but he remains optimistic: "Robust earnings growth should support further market gains next year," he says.

S&P 500 Trends and Market Reactions

The S&P 500 hit a record high the day following the election, as the uncertainty surrounding the outcome quickly dissipated.

Brian Garrett, head of Equity Execution at Goldman Sachs, observed, "Few anticipated that the result would be clear by 11 am on Wednesday." He pointed out that, historically, US elections have taken longer to finalize. The rapid decline in the VIX (CBOE Volatility Index), one of the largest in the last decade, highlighted the market's relief at the swift resolution.

Outlook for US Equities

Kostin believes that the end of political uncertainty is a significant, short-term boost for the stock market. Historically, the S&P 500 has seen a median return of 4% from Election Day through the end of the year. Combined with strong economic data and potential interest rate cuts from the Federal Reserve, the outlook for US stocks remains "healthy," according to Kostin.