Goldman Sachs issues warning: S&P 500 faces "roadblock" in short-term rise, any rebound may be short-lived.

Goldman Sachs strategists believe that, given the market's concerns about the US economy, any rebound in the S&P 500 index could be short-lived. Strategist David Kostin pointed out in a report last week that as the benchmark index briefly erased its gains since 2025, investors' risk exposure decreased. However, this exposure level is still not low enough to indicate "tactical upside potential due to holding weak positions." Kostin stated, "To completely reverse the recent weakness in US stocks, the outlook for US economic growth must improve." At the same time, he lowered his full-year profit growth forecast from 11% to 9%. In 2024, Kostin was one of those bullish on US stocks. He believes that in 2025, "stock market returns will be lower than last year, in line with the trajectory of earnings growth." This year, US stocks have performed poorly due to concerns about the overvaluation of tech giants. Investors also question whether President Donald Trump's "America First" policy will lead to inflation and economic slowdown. The S&P 500 index has only risen by about 1% this year, while the MSCI All Country World Index excluding the US has risen by 5%. Scott Rubner, Goldman Sachs Global Markets Chairman and Tactical Specialist, also believes that market demand is not enough to support a sustained rally. Rubner turned bearish last month, citing a gradual decrease in inflows from retail investors and other buyers. He pointed out that the market is in the final stage of position adjustments. Morgan Stanley strategist Michael Wilson, who was a staunch bear until mid-2024, also believes that compared to the decline in bond yields, the stock market may be more sensitive to economic growth.