New Delhi, March 12 -- Goldman Sachs Group Inc. is turning more cautious on US credit and equity markets, becoming the latest on Wall Street to sound the alarm as the world's largest economy is battered by President Donald Trump's escalating trade war.

Goldman strategists sharply raised their forecasts for US credit spreads, citing tariff risks and signs that the White House is willing to tolerate short-term economic weakness. The bank also cut its year-end target for the S&P 500 index. At the same time, Goldman's teams raised European earnings estimates and expect the region's credit spreads to show more resilience than the US.

"We are revising our spread forecasts wider to levels that demonstrate a more persistent repricing of risk pr...