The rise of the American middle class: Goldman Sachs bets on US stocks in 2026, passing the baton from the "consumption bull" to AI.

As the market cools down from the AI-related trading frenzy, Wall Street strategists are actively seeking new growth engines for the bull market in US stocks. Led by Ben Snider, the analyst team at Goldman Sachs Group, Inc. has set its sights on companies benefiting from increased consumer spending by the middle class. The Snider team is bullish on healthcare service providers, material producers, and essential consumer goods manufacturers, while particularly optimistic about companies selling non-essential luxury goods. These companies include high-end fashion and accessory retailers, home goods manufacturers, travel agencies, and gambling operators. The Goldman Sachs Group, Inc. analysis team points out that the US economic growth is expected to accelerate, which will drive a group of stable but low-profit margin companies to improve profitability - these companies have been outperforming the market since October last year. In an investor report released on January 6th, Snider's team wrote, "Stocks with a large exposure to middle-class consumer spending are particularly attractive. At the beginning of 2026, value stocks are expected to continue leading the market. The actual income growth of the middle class is expected to accelerate, and this trend will growth momentum for corporate sales." The S&P Retail Select Industry Index, covering companies such as CarMax, Inc. (KMX.US), Etsy (ETSY.US), and Academy Sports & Outdoors (ASO.US), has accumulated a 3.5% increase since the beginning of the year and an 8.8% increase since the busy holiday shopping season began in November last year. The Goldman Sachs Group, Inc. team expects multiple positive factors to inject momentum into the consumer market, such as the gradual disappearance of negative effects from the Trump administration's tariffs, a stabilizing labor market, and the tax incentives released by major laws passed by the US government last year, all of which will boost consumer vitality. Currently, investors are eager to find alternative directions for AI concept stocks that have led the market surge in the past three years, with the AI sector led by the "Big Seven" previously being the absolute protagonist in the market. Economists surveyed predict that with the pull of consumer spending, the US economy will achieve 2.1% growth this year. This expectation is driving investors to shift funds to sectors that have lagged in performance in recent years. Charlie McElligott, International Cross-Asset Macro Strategist at Nomura Securities, stated, "The market is raising expectations for US economic growth. If this trend continues, it will benefit more traditional value stocks." He added in an interview, "Last year, the market showed a clear trend of differentiation, with only 12 stocks supporting the entire market rally. Now, the market's rise is spreading to a wider range of areas." "Investors are beginning to shift towards sectors with higher beta coefficients in the market," explained McElligott, noting that these sectors often have greater volatility and are closely related to the economic conditions of the average American consumer. Dick's Sporting Goods, Inc. (DKS.US) is an early beneficiary of this potential sector rotation. The company, headquartered in Coraopolis, Pennsylvania, specializes in sports equipment such as golf clubs, soccer shoes, and tennis rackets. The company's stock price dropped 13% in 2025, but started strong in 2026, with the stock rising 6.1% in just four trading days, reaching $210.08. According to Chris Murphy, Co-Head of Derivatives Strategy at Susquehanna International Group, in Tuesday's options trading, investors bet on the stock rebounding to its historical high of $250 - a price the retailer set at the beginning of 2025. The cost of the option position was $84,000, with a potential maximum return of $3.5 million. In addition to Dick's Sporting Goods, Inc., Goldman Sachs Group, Inc. also lists five other retail chain companies benefiting from the growth of the middle class wealth, including Burlington Stores, Inc. (BURL.US), Best Buy Co., Inc. (BBY.US), Five Below (FIVE.US), Levi Strauss & Co. Class A (LEVI.US), and Gap (GAP.US). Indeed, physical retailers have always faced fierce competition from e-commerce giants like Amazon.com, Inc. (AMZN.US). But against the backdrop of high valuations for large tech and AI-driven companies, investors seem to be turning their attention to other investment opportunities. At least in the early part of 2026, the value stocks sector has become a "value oasis" in the market. McElligott bluntly stated, "The valuation of growth stocks has become absurdly high."