Goldman Sachs has raised its year-end forecast for the S&P 500 index from 5200 to 5600, due to strong profit growth among the five major US tech giants and higher reasonable P/E multiples.

According to last Friday's closing data, the stock prices of Microsoft, Nvidia, Google, Amazon, and Meta have all risen by more than 45%, now accounting for 25% of the market value of the S&P 500 index.

Goldman Sachs stated in a report, "The market's upward drivers include an increase in profit expectations for these technology companies in 2024, as well as an increase in valuations driven by investors' growing interest in artificial intelligence (AI)."

Goldman Sachs expects that the actual yield will remain relatively stable by the end of the year, while strong profit growth will support the weighted S&P 500 index to reach a price to earnings ratio of 15 times.

Goldman Sachs analysts pointed out, "The (US) election remains a significant risk to the S&P 500 index level and is between our three-month and year-end forecast timelines."

The next presidential election of the United States will be held in November this year.

According to Goldman Sachs, the volatility of the index during an election year tends to rise before the election, but typically decreases after the election, and the S&P 500 index will recover to higher levels.