Goldman Sachs has downgraded its S&P 500 forecast, now predicting a modest 3% increase by year-end, down from 12%. The bank anticipates a 15 percentage point rise in average US tariffs, leading to inflation hitting 3.4% and a 35% chance of recession within the next year. If a recession occurs, profits for S&P 500 companies could drop by 13%, potentially causing a 17% decline in stock values. Investors are increasingly favoring foreign stocks, particularly in Europe, as US economic pressures mount.