Goldman Sachs: 'Goldilocks' Scenario Could Trigger Late-Year U.S. Market Rally

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Release Time: 2026/09/27 12:32:55

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Summary

Goldman Sachs sees a potential market rally emerging as the "Goldilocks" scenario gains momentum. The firm argues that markets may be overpricing stagflation and rising U.S. Treasury yields. With declining energy prices, easing tariffs, and AI-driven cost savings, U.S. inflation pressures could ease. Goldman partner Mark Wilson says AI assets are regaining favor, and the Fear & Greed Index is showing early signs of a year-end shift. Jan Hatzius noted that growth risks are receding, while Ben Snider expects strong corporate earnings through 2027. If inflation continues to decline and growth remains stable, the market could shift from stagflation to a "Goldilocks" environment.

ME AI message, on September 27, Goldman Sachs believes the market may currently be overpricing the risks of stagflation and rising U.S. Treasury yields. As the impact of tariffs diminishes, energy prices potentially decline, and AI technologies drive down costs, U.S. inflationary pressures are expected to ease. Meanwhile, although economic growth may slow, corporate core earnings remain resilient. Under this "Goldilocks" scenario, investor enthusiasm for AI could reignite, and the year-end rally in U.S. equities may not need to wait until after the U.S. midterm elections. Mark Wilson, partner at Goldman Sachs, noted that recent market movements already show signs of this shift, with AI-related assets regaining investor interest after months of consolidation. Economist Jan Hatzius at Goldman Sachs believes the upside risks to U.S. economic growth are waning; as fiscal stimulus fades and gasoline prices and mortgage rates rise, economic growth could slow further, limiting central banks’ room to continue raising rates. Ben Snider, head of Goldman Sachs’ U.S. equity strategy team, argues that although some sectors have experienced temporary "excess profits," corporate core earnings are likely to maintain strong growth through the end of 2027. Based on this, Goldman Sachs believes that if inflation continues to decline, economic growth moderates gently, and corporate earnings remain resilient, the market may gradually shift from previous stagflation trades toward a "Goldilocks" scenario. (Source: MLion)

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