Hua Er Jie Jian Wen·2025-07-08 13:43Core Viewpoint - Despite renewed tariff threats from the Trump administration, Wall Street's confidence in the U.S. stock market appears to be increasing, with major investment banks raising their year-end targets for the S&P 500 index [1][3]. Group 1: Market Sentiment and Predictions - Goldman Sachs has raised its year-end target for the S&P 500 index from 6100 to 6600 points, indicating a potential 5.9% upside for the U.S. stock market by year-end [1]. - The optimism in the market is driven by expectations of earlier interest rate cuts from the Federal Reserve, declining U.S. Treasury yields, and the strong performance of large corporations [3][4]. - Goldman Sachs also increased its 12-month forward target for the S&P 500 from 6500 to 6900 points, citing strong first-quarter earnings as a confidence booster [4]. Group 2: Impact of Tariffs - The Trump administration's tariff threats have created significant uncertainty, but the fundamental strength of large-cap stocks and long-term investor outlooks are supporting market prospects [4]. - Companies are expected to gradually adjust their cost-cutting and pricing strategies to mitigate the negative impacts of tariffs, with large companies having sufficient inventory to buffer against immediate tariff increases [4]. - The actual impact of tariffs remains a focal point for investors, as some U.S. companies have already lowered or canceled profit forecasts due to anticipated rising input costs [7]. Group 3: Earnings Season Outlook - The upcoming earnings season is viewed as a critical test for market resilience, with major banks and tech giants set to report [5][6]. - Analysts expect the average earnings per share for S&P 500 constituents to grow by 4.5% year-over-year, with the "Tech Seven" contributing nearly half of this growth [6]. - A weaker dollar, which has depreciated by 10% against a basket of currencies this year, is seen as a favorable factor for large-cap tech stocks, as approximately 60% of their revenue comes from overseas [6].