Average Forward S&P 500 Returns Following Large Declines in U.S. Equity Sentiment Indicator When the GS sentiment indicator reaches such a low level, the S&P 500 typically delivers an average forward two-week return of approximately +125bps, with a positive hit rate of 70%. Image: Goldman Sachs Global Investment Research
Two-day Performance for the S&P 500 The two-day decline of 10.5% in the S&P 500 last Thursday and Friday marked its fifth-worst drop since World War II. The turmoil is likely to persist as long as there are no concrete signs of tariff reductions or de-escalation in trade tensions. Image: Deutche Bank
S&P 500 10% Drop in Two Days A 10% drop in the S&P 500 over two days is unusual, but history shows that sharp declines are often followed by strong recoveries, giving investors reason for optimism. Image: Carson Investment Research
Earnings – Peak to Trough Decline in LTM S&P 500 EPS During Recessions Historically, recessions since World War II have caused a median 13% decline in S&P 500 EPS, often leading to substantial index losses. Image: Goldman Sachs Global Investment Research
ISABELNET Cartoon of the Day The “Liberation Day” effect has set equity markets free—free to plummet, that is! Have a Great Week, Everyone! 😎
Impact on U.S. YoY Real GDP Growth Goldman Sachs has cut its 2025 Q4/Q4 GDP growth forecast to 0.5% and raised its 12-month recession probability from 35% to 45%, citing tighter financial conditions, foreign consumer boycotts, and heightened policy uncertainty. Image: Goldman Sachs Global Investment Research
U.S. High Yield Credit Spreads vs. VIX High-yield credit spreads have widened by over 150bps from their 17-year lows, signaling growing financial stress. While rising credit spreads have often been a precursor to recessions, they can sometimes lead to false signals. Image: Topdown Charts
S&P 500 Annualized 10-Year Total Return Forecasts Goldman Sachs forecasts a 3% average annualized total return for the S&P 500 over the next decade. This projection is notably lower than historical averages, driven by worries about elevated equity valuations. Image: Goldman Sachs Global Investment Research
Large U.S. Tax Hikes Trump’s tariffs represent the most significant U.S. tax increase since 1968, raising widespread concerns about their long-term effects on the economy. Image: J.P. Morgan
ISABELNET Cartoon of the Day As the S&P 500 tumbles 9.08% this week, bears are popping champagne, and bulls are asking, “Is there even a floor anymore?” Have a Great Weekend, Everyone! 😎
S&P 500 Profit Margin – Operating Earnings/Sales Structural changes in the market—such as the rise of high-margin sectors like technology, economies of scale, and favorable financial conditions for large-cap firms—have driven elevated profit margins in the S&P 500. Image: J.P. Morgan Asset Management