Trump's Tariffs Slow Economy, S&P 500 Valuation Warning
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 2h ago
0mins
Source: Fool
- Tariff Impact: Trump's tariffs raised the average tax on U.S. imports to 16.8% in 2025, resulting in nine consecutive months of contracting manufacturing activity and a four-year high in unemployment, indicating the detrimental effects of tariff policies on the economy.
- Consumer Sentiment Decline: The consumer sentiment index recorded its lowest annual average in 2025 since 1960, reflecting that tariff policies failed to protect American workers and instead exacerbated economic uncertainty.
- CAPE Ratio Warning: As of December, the S&P 500's average CAPE ratio reached 39.4, the highest since the 2000 dot-com bubble, with historical data suggesting that such high valuations typically foreshadow declines in stock market returns over the following year.
- Illusory Economic Growth: Although GDP growth hit 4.3% in Q3, this was artificially inflated due to companies stockpiling inventory ahead of tariffs, suggesting that actual economic growth may face significant headwinds in the future.
Analyst Views on GS
Wall Street analysts forecast GS stock price to fall over the next 12 months. According to Wall Street analysts, the average 1-year price target for GS is 829.54 USD with a low forecast of 750.00 USD and a high forecast of 890.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
14 Analyst Rating
6 Buy
8 Hold
0 Sell
Moderate Buy
Current: 884.420
Low
750.00
Averages
829.54
High
890.00
Current: 884.420
Low
750.00
Averages
829.54
High
890.00
About GS
The Goldman Sachs Group, Inc. is a global financial institution that delivers a range of financial services to a large and diversified client base that includes corporations, financial institutions, governments and individuals. Its segments include Global Banking & Markets, Asset & Wealth Management and Platform Solutions. The Global Banking & Markets segment offers a range of services, including financing, advisory services, risk distribution, and hedging for its institutional and corporate clients. It facilitates client transactions and makes markets in fixed income, equity, currency and commodity products. The Asset & Wealth Management segment manages assets and offers investment products across all asset classes to a diverse set of clients. It also provides investing and wealth advisory solutions. The Platform Solutions segment includes consumer platforms, such as partnerships offering credit cards and point-of-sale financing, and transaction banking and other platform businesses.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
