Goldman Sachs reckons a weaker dollar might cushion S&P 500 profits even as tariff battles heat up.You've probably noticed tariff talk everywhere lately. Companies worry that higher trade barriers will slam their margins.
At the same time, the trade‑weighted dollar is down about 7% this year, and Goldman's team sees another 4% slide by year‑end.
That matters because almost a third of S&P 500 sales come from overseas. When the dollar falls 10%, earnings per share tend to pop by roughly 2–3%, all else equal. Tech giants feel it most. Nearly half of Nasdaq 100 revenue streams in from abroad, and the Information Technology sector tops 50 percent foreign sales.
On the flip side, Goldman expects the U.S. economy to outpace most peers in 2025 and 2026, giving home‑grown firms a boost. Yet rising tariffs—now forecast to hit a 19% effective rate by early 2027—still pose a real threat to those with big international footprints.
In an era when supply‑chain security is under the microscope, currency moves can be a hidden tool for managing profit swings. A soft dollar won't erase tariff pain, but it can soften the blow.
With Q2 earnings rolling in, Goldman's call on a weaker dollar underpins its view that the S&P 500 can climb another 10% over the next year.
