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Goldman Sachs ( GS ) raised it forecast for the S&P 500 by year-end as the U.S. economy shows increasing signs of resilience.

The investment bank now sees the index hitting 6,000 by the end of this year, up from from 5,600 in previous estimates, according to a research note released Friday. Goldman maintained its earnings per share forecast of $241, up 8% for the full year.

The S&P 500 — considered a benchmark for the U.S. stock market tracking the largest companies in the country — has soared more than 20% in 2024 so far, adding more than $8 trillion to its market capitalization.

As the market continues to rally towards new record highs to cap off this year, economic data continues to suggest that the U.S. economy may be out of the woods.

Friday’s jobs report blew estimates out of the water . In September, the U.S. created 254,000 jobs, and the unemployment rate ticked down one percentage point to 4.1%, according to Bureau of Labor Statistics data. The agency also revised its July and August job figures upward.

The news helped calm investors’ concerns about a potentially stagnating labor market and economy. On the strong employment data, Goldman cut its 12-month recession odds to just 15%. That brings the investment bank’s probability of an economic downturn back to where it was in June, prior to a spike in the unemployment rate that briefly sent the market into a tailspin .

Goldman also noted that it expects output — as measured by Gross Domestic Product (GDP) — to remain strong and inflation to stay in line with expectations, despite upward pressures like rising oil prices driven by escalating tensions between Israel and Iran.

Inflation has continued to trend towards the central bank’s 2% target. The latest Personal Consumption Expenditures (PCE) index, the Fed’s preferred inflation reading, came in at 2.2% in August.

Last month, the Fed’s decision-making arm — the Federal Open Market Committee (FOMC)— voted to start its highly anticipated interest rate cutting cycle with an aggressive, half-basis-point cut that brought the federal funds rate to 4.75-5.0%.

While Goldman believes that given the latest economic data, the Fed might have opted for a smaller, 25-basis-point cut, “that doesn’t mean the 50bps cut was a mistake,” economists at the bank wrote.

This also set the stage for what will likely be a 25-basis-point interest rate cut by the Federal Reserve in November.

“We think the FOMC was late to start cutting, so a catch-up that brings the funds rate closer to the levels of around 4% implied by standard policy rules makes sense even in hindsight,” Goldman said. “However, the recent numbers do strengthen our conviction that the next few meetings (including November 6-7) will bring smaller 25bp cuts.”

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