Goldman Sachs Stock Falls 4.9% as Fed Rate Cut Outlook Shifts, June 08

Goldman Sachs stock dropped 4.9% to $1,038.68 on June 8 after the firm pushed back its Federal Reserve rate cut forecast. The bank no longer expects a rate cut this year, moving its forecast to June and December 2027. Strong US jobs data released on June 5 triggered a broad market selloff, with the S&P 500 falling 2.6% and the Nasdaq dropping 4.2%, weighing on financial stocks.

Why Goldman Sachs Revised Its Rate Outlook

Goldman Sachs economists revised their Federal Reserve forecast after May nonfarm payroll data came in stronger than expected. The US added 172,000 jobs in May, far exceeding the market forecast of 85,000, while the unemployment rate held steady at 4.3%. This strong labor market data weakened expectations for near-term rate cuts and raised concerns about potential further rate hikes before year-end. The bank pushed back its forecast for the Fed’s final two rate cuts to June and December 2027 from previous expectations of December 2026 and March 2027.

Market Selloff Hits Financial and Tech Stocks

The jobs data triggered a broad market decline on June 5. The S&P 500 fell 2.6%, the Dow Jones Industrial Average dropped 1.4%, and the Nasdaq Composite tumbled 4.2%. The Philadelphia Semiconductor Index crashed 10.3%, marking its worst single-day performance since March 2020. Rising Treasury yields and a strengthening US dollar pressured global risk assets, with tech stocks bearing the brunt of the selling. Financial stocks faced particular pressure as investors reassessed valuations in a higher-for-longer rate environment.

Goldman’s View on the Dip

Despite the market decline, John Flood, head of Americas equity execution services at Goldman Sachs, viewed the selloff as a buying opportunity. Flood stated that the S&P 500 still has a clear path to challenge the 8,000-point mark this year and noted that historically, buying when the S&P 500 pulls back 2% has been rewarding. He emphasized that there have not been many opportunities to buy the dip in 2026, making this pullback potentially attractive for long-term investors.

What the Data Shows for GS Stock

Meyka rates GS a B+ with a 12-month price target of $1,064.43, implying 2.5% upside from current levels. Analyst consensus stands at 3.0, with 7 buy ratings and 10 hold ratings. The stock trades at a PE ratio of 17.5 and a price-to-book ratio of 2.58. The RSI stands at 60.92, indicating neutral momentum, while the ADX at 29.26 shows a strong trend. With delayed rate cuts reducing near-term margin expansion for banks, the stock faces headwinds, though the B+ grade suggests long-term value remains.

Final Thoughts

Goldman Sachs stock fell 4.9% on revised Fed rate cut forecasts and broader market weakness. With Meyka rating the stock B+ and targeting $1,064.43, the data points to modest upside despite near-term rate headwinds for the financial sector.

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The content shared by Meyka AI PTY LTD is solely for research and informational purposes.  Meyka is not a financial advisory service, and the information provided should not be considered investment or trading advice.