Goldman Sachs strategist warns: U.S. stocks are priced at "perfect levels" and are at risk of a pullback.

Goldman Sachs' Chief Global Equity Strategist Peter Oppenheimer warns that with investors digesting rising bond yields, high valuations, and uncertainty about further interest rate cuts, the current "perfect" money-making market environment may be difficult to sustain. Peter Oppenheimer said: "The recent strong rebound in the U.S. stock market has made valuations in the current stock market trend towards perfection. Although we expect the stock market to continue to rise overall this year mainly driven by corporate earnings, it is becoming easier for the stock market to be hit by a correction, especially if bond yields continue to rise or economic data and earnings performance disappoint." Peter Oppenheimer stated that three factors have complicated the outlook for the U.S. stock market in 2025, including: the rapid rise in the stock market may have already reflected optimistic expectations for economic growth in 2025; high valuations limit the longer-term returns of stocks; and the unusual market concentration increases portfolio risk. Peter Oppenheimer said: "A simple comparison between the most cyclical sectors and the most defensive sectors can show that the strong performance of the stock market in recent months largely reflects higher growth expectations, particularly in the U.S., where optimism about the Trump administration's relaxed regulations and tax cuts has also played a role." "This makes the stock market vulnerable to any disappointing growth, especially depending on the specific policy measures of the incoming Trump administration in terms of tax and tariffs."