Goldman Sachs reveals lurking risks as stock market surges
View original at finance.yahoo.comGoldman Sachs reveals lurking risks as stock market surges The S&P 500 is up roughly 10% in 2026. Global earnings are being revised higher. Corporate capital spending is at levels not seen in decades…
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AI infrastructure stocks have seen cumulative EPS estimate increases of 59% since January 2025.
60% confidenceInvestors chasing the same momentum trades tend to produce sharper reversals when conditions shift.
60% confidenceThe S&P 500 overall is up 9% since January 2025. The S&P 500 excluding AI infrastructure is up just 1%.
60% confidenceBottom-up consensus estimates for S&P 500 EPS in both 2026 and 2027 have each been revised upward by 8 percentage points so far this year. In most years, analyst estimates drift lower; in 2026 the opposite is happening.
60% confidenceTechnology, media, and telecom have accounted for 85% of the S&P 500's year-to-date return in 2026. That concentration creates fragility that broad index performance obscures.
60% confidenceGoldman's Risk Appetite Indicator recently rose above 1.1, placing it in the 99th percentile since 1991 and at its highest reading since 2021.
60% confidenceThe equity market rally may be more fragile than it looks, despite strong headline performance.
60% confidenceThe correlation between equities and bond yields has turned negative, making the bond market the biggest risk to equities.
60% confidenceUS retail trading volumes have risen 28% since mid-April 2026, and a basket of retail-favorite stocks has rallied 29% over the same period.
60% confidenceNominal global GDP growth is running at 5.9% in 2026, up from 4.7% in 2025, with earnings revisions positive across every S&P 500 sector.
60% confidenceThe momentum factor has become unusually elevated, driven by technology and commodity-related sectors. When momentum concentrates that sharply, weakness in the broad market gets masked by strength at the top.
60% confidence
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