Goldman Sachs Sees Resilience in the U.S. Stock Market Amid Market Instability

Goldman Sachs strategists, led by Christian Müller-Glissmann, are forecasting greater resilience in the U.S. stock market than many investors expect, suggesting a low probability of a severe recession.

Despite challenges such as higher valuations, mixed economic growth, and policy uncertainty, they believe the strength of the private sector and anticipated monetary easing will help avoid a significant bear market.

Historical trends support this view, showing that major market corrections—defined as declines of 20% or more in the S&P 500 index—have become less frequent since the 1990s. This is attributed to longer business cycles, lower macroeconomic volatility, and proactive central bank interventions.

However, the strategists maintain a neutral stance on asset allocation with a slight preference for riskier assets. This cautious optimism follows recent major sell-offs, where global equities lost over $4 trillion in a week—the largest drop in two years.

The backdrop includes rising costs of U.S. federal debt, which now exceed $1.1 trillion annually, reaching $3 billion a day. The Federal Reserve’s interest rate hikes are contributing to these concerns.

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