Goldman Sachs Warns: S&P 500 Rally May Falter After 5% Selloff
Goldman Sachs analysts have warned that the S&P 500 rally may face further headwinds following a recent 5% pullback, driven by an unwinding of elevated positioning and growing economic growth concerns. The firm's momentum factor has dropped 7%, while cyclical stocks have underperformed defensive stocks by about 9%. An improved U.S. economic growth outlook is seen as necessary to reverse the recent market rotations.
- This warning highlights the fragility of the current market rally, which has been fueled by unprecedented monetary policy and fiscal stimulus.
- Can policymakers maintain enough momentum in the coming months to prevent a full-blown bear market, or will investors become increasingly risk-averse?