A combination of unprecedented policy support and a flattening viral curve has “dramatically” cut risks to both markets and the American economy, Goldman Sachs Group's strategists, including David Kostin, wrote in a note Monday, Bloomberg reported. If the U.S. doesn’t have a second spike in infections after the economy reopens, equity markets are unlikely to make new lows, they added.

“The Fed and Congress have precluded the prospect of a complete economic collapse,” the strategists noted. “These policy actions mean our previous near-term downside of 2,000 is no longer likely” for the S&P 500 Index.

The strategists cited policy measures including rate cuts, the Federal Reserve’s Commercial Paper Funding Facility and fiscal stimulus such as the $2 trillion CARES act among the “numerous and increasingly powerful” actions that have spurred equity investors to take a risk-on view.

Meanwhile, they expect investors to look through first-quarter results from the upcoming earnings season, and focus instead on the outlook for 2021.

“Despite the likely steady stream of weak earnings reports, 1Q earnings season will not represent a major negative catalyst for equity market performance,” they wrote. “Our year-end S&P 500 target remains 3,000.”