Valuation Ranges of MSCI World Styles Indices Across markets and styles, valuations remain lofty amid AI-driven optimism and market concentration, forcing investors to pick their spots carefully. Image: Goldman Sachs Global Investment Research
S&P 500 Shiller CAPE vs. Subsequent Calendar-Year Total Return In the short run, the Shiller CAPE ratio often gets lost in the market’s noise. Over five to ten years, however, its warning grows clearer: the higher the valuations, the thinner the returns. Image: Goldman Sachs Global Investment Research
S&P 500 – Which Will Perform Best in 2026? More portfolio managers see the “S&P 493” gaining ground on the Magnificent 7 this year, with fundamentals improving and valuation spreads closing amid worries over index concentration. Image: Goldman Sachs Global Investment Research
Economy-Wide Firm AI Adoption Rate AI adoption keeps gaining ground, with 17.3% of firms already using artificial intelligence in their regular operations, a share projected to top 21.1% within six months. Image: Goldman Sachs Global Investment Research
Market Capitalization of the Largest Stock Relative to the 75th Percentile Stock U.S. stocks are more top-heavy than at any point in nearly a century, with mega-cap tech driving the charge. The dominance is juicing index gains—but also flashing warnings on risk and concentration. Image: Goldman Sachs Global Investment Research
Valuations – Market Values as a Proportion of World GDP Global equities have tripled their weight since the 1990s, jumping from 75% to above 200% of world GDP—an expansion that screams just how far valuations have run. Honestly, what could go wrong? Image: Goldman Sachs Global Investment Research
S&P 500 Valuation Despite lofty valuations, the fuel behind U.S. stock market performance this year has been earnings growth, not multiple expansion. Image: Goldman Sachs Global Investment Research
Full-Year Real GDP Growth Trade barriers, shifting immigration policies, and broader uncertainty are expected to keep the U.S. economy from reaching its potential this year, despite ongoing technological investments. Image: Goldman Sachs Global Investment Research
Seven Largest Companies as Share of S&P 500 Total Market Capitalization The seven largest stocks in the S&P 500 make up 34% of the index’s total market capitalization. Although such a high concentration doesn’t guarantee market declines, it has the potential to increase volatility. Image: Goldman Sachs Global Investment Research
Foreign Revenues of S&P 500 Companies While S&P 500 companies are broadly exposed to global markets, the majority of their sales—and thus, much of their operational and macroeconomic risk—remains tied to the U.S. economy. Image: Goldman Sachs Global Investment Research
U.S. 10-Year Treasury Term Premium The increasing term premium signals that investors require greater compensation for the risks inherent in holding longer-term bonds, reflecting increased concerns about interest rate and inflation over longer durations. Image: Goldman Sachs Global Investment Research