S&P 500 Sector P/E Valuations Relative to History Historical data and sector-specific valuation metrics show that several S&P 500 sectors have tended to remain overvalued relative to their historical averages and to other sectors. Image: Goldman Sachs Global Investment Research
U.S. Real Yields and Gold Gold’s typical inverse link to real rates is fundamental, but inflation expectations, central bank buying, geopolitical risks, and investor sentiment driven by debt and fiscal worries can disrupt this relationship for extended periods. Image: Goldman Sachs Global Investment Research
S&P 500 Performance After 90-90 Days The NYSE “90/90 day” on Friday—when 90% of volume and stocks rose—is rare and bullish. Since 1980, such days often precede strong market gains, with the S&P 500 rising over 90% of the time a year later, averaging 23% gains.
S&P 500 Valuation Several long-term valuation metrics indicate that the S&P 500 is significantly overvalued. Historically, elevated valuations like these have typically led to below-average long-term equity returns. Image: Bloomberg
Probability of U.S. Recession Calculated from the Yield Curve The probability of U.S. recession in 12 months, calculated from the yield curve, stands at 25.7%. Image: Federal Reserve Bank of Cleveland
Bloomberg Dollar Spot Index Powell’s speech has put the U.S. dollar gauge under pressure, confirming a test of technical support is underway amid growing market bets on imminent Fed rate cuts to address softer employment data and economic risks. Image: Bloomberg
Fed Funds Rate – Target Probabilities at the Fed’s FOMC Meeting Traders exhibit some optimism for a Fed rate cut at the September 17, 2025 FOMC meeting, with a 75% probability assigned to a 25 basis point reduction. Image: CME Group
Consensus EPS Growth Estimates Consensus estimates indicate that S&P 500 EPS will grow about 9% in 2025, followed by a 14% increase in 2026. This outlook highlights the resilience of the corporate sector despite persistent economic uncertainty and trade challenges. Image: Goldman Sachs Global Investment Research
Inflation – Fed Funds Rate and CPI Since the federal funds rate currently exceeds the inflation rate by a significant margin, monetary policy is considered too tight, which is why markets are eagerly expecting rate cuts. Image: Real Investment Advice
S&P 500 Return After the Fed Waits Between 5-12 Months to Cut Since 1970, whenever the Fed has waited between 5 and 12 months to cut rates, the US stock market has delivered positive returns 90.9% of the time over the following 12 months, with a median gain of 14.5%—giving bulls plenty of reason to…
Valuation – PE10 Ratio USA vs. Rest of the World Investors aiming for long-term growth beyond the U.S. equity market may find emerging markets and non-U.S. developed markets compelling due to their valuations, robust growth prospects, and diversification benefits. Image: Topdown Charts