SINGAPORE, July 8 (Reuters) - Goldman Sachs ( GS ) has raised

its three-, six- and 12-month return forecasts for the S&P 500,

citing expectations of U.S. interest rate cuts and continued

fundamental strength of major large-cap stocks as key drivers of

its positive outlook.

The Wall Street bank has revised its S&P 500 return

forecasts, projecting a 3% gain over three months and an 11%

gain over 12 months, targeting index levels of 6,400 and 6,900,

respectively.

"Earlier and deeper Fed easing and lower bond yields than we

previously expected, continued fundamental strength of the

largest stocks, and investors' willingness to look through

likely near-term earnings weakness support our revised S&P 500

forward P/E forecast of 22 times from 20.4 times," analysts said

in a note late on Monday.

For the index's six-month return, Goldman Sachs ( GS ) has raised

its forecast to +6%, projecting a year-end level of 6,600, and

up from its previous estimate of 6,100.

Wall Street closed at record highs last week, buoyed by

signs of resilience in the country's labour market, which defied

investor fears of a slowing economy.

After a selloff in April following U.S. President Donald

Trump's "Liberation Day" tariff announcements, stocks have

rebounded as hopes for trade deals and potential Federal Reserve

rate cuts eased investor uncertainty.

"Recent inflation data and corporate surveys indicate

less tariff pass-through so far than we expected," the analysts

said.

"However, we expect the digestion of tariffs to be a

gradual process, and large-cap companies appear to have some

buffer from inventories ahead of the increase in tariff rates."

The analysts maintained their earnings-per-share growth

forecasts for the S&P 500 at +7% for both 2025 and 2026, but

flagged that risks remain on both the upside and downside. They

plan to reassess these estimates following the second-quarter

earnings season.