S&P 500 Semiconductor Gross Margins The S&P 500’s leading AI semiconductor companies have enjoyed a powerful expansion in gross margins during the last few years. Image: Goldman Sachs Global Investment Research

Smoothed U.S. Recession Probabilities The probability of U.S. recession stands at 0.62%. When this recession indicator exceeds 5% (red line), history suggests that the probability of recession increases significantly. The chart shows the smoothed U.S.…

Market-Implied Long-Term S&P 500 Growth Expectations The market-implied long-term growth expectation for the S&P 500 is currently +10%, above the historical average but nothing like the dot-com bubble excess. Image: Goldman Sachs Global Investment Research

Seasonality – S&P 500 Index Average Monthly Returns October has a strong track record in midterm election years, averaging a 3% gain since 1950 and finishing higher nearly 74% of the time. With investors already…

Contribution to Consensus S&P 500 EPS Growth Strong 2026 earnings growth has helped bring down the S&P 500’s forward P/E multiple. Consensus expects growth to cool in 2027 and 2028, but slower earnings growth alone…

Implied Probability of S&P 500 Drawdown Drawdown risk for the S&P 500 has increased recently, amid rising yields, looming rate hikes, and weak market breadth. Image: Goldman Sachs Global Investment Research

Valuation – Hyperscaler Forward P/E Valuations for the hyperscalers have come down meaningfully from their peak and now sit at their lowest level in 10 years. They’re still not a bargain, but the risk‑reward looks…

U.S. Composite PMI U.S. business activity surged in September to its fastest pace since July 2021. But, the expansion also intensified inflation risks. Image: Bloomberg

S&P 500 Performance When Up YTD Between 10-20% at the End of September When the S&P 500 is up 10% to 20% YTD by late September, Q4 tends to be bullish, with an 86% success…

Valuation – S&P 500 Cyclically-Adjusted P/E Ratio (CAPE) vs. Consensus Forward 12-Month S&P 500 P/E Prices have lagged the earnings boom, pulling near-term valuations below their trend-earnings multiples. The US market, for now, shows no…

S&P 500 Presidential Cycle Year three of the presidential cycle is Wall Street’s historically strongest period. With that phase just around the corner, the S&P 500 looks positioned for a solid 2027, enough to keep…