Prediction: The S&P 500 Could Hit 6,500 Next Year

By Douglas A. McIntyre Published Nov 19, 6:45AM EST

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Prediction: The S&P 500 Could Hit 6,500 Next Year — © ipopba / iStock via Getty Images

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Goldman Sachs has forecast that the S&P 500 could rise 10% by the end of next year.
What could fuel that rise, and what could derail it?
Also: Dividend legends to hold forever.

Goldman Sachs has forecast that the S&P 500 could hit 6,500 by the end of next year. It is below 5,900 today, so the increase would be 10%. That seems modest. However, it indicates that one of the greatest bull markets in history would continue its ascent.

The S&P 500 is up 25% this year and almost 50% over the past two years. The combined market cap of all its components is just shy of $50 trillion. Nvidia, Apple, Microsoft, Amazon, and Alphabet have over $14 trillion of that.

What could derail the rise, and what could fuel it? First and foremost are earnings. This is especially true of the five mega caps. Poor earnings from any of them could take the market down. An erosion of earnings overall would only be likely in the face of a recession or a geopolitical disaster. Strengthening earnings could push the market higher.

Most economists believe a recession is unlikely in the short term. However, that could change with the new administration’s policies. It is only a guess, but high tariffs on foreign goods could trigger inflation. Inflation could hurt the purchasing power of both individuals and businesses. For the time being, that is nothing more than a theory.

A geopolitical disaster could undermine the market quickly, perhaps in a single day. An increase in hostilities in the Middle East could cut oil supply. It could also engage U.S. military forces. Additionally, Russia continues to say that the United States is escalating the war in Ukraine. The primary Russian threat is the use of tactical nuclear devices. Even a credible threat of Russian aggression at that level could tank the market.

The S&P 500 might hit 6,500 by the end of 2025, but that is very far away.

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About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.