A market pullback is more likely than a continued rally, Goldman Sachs says

Goldman Sachs warns a market pullback is more likely than a continued S&P 500 rally, citing stretched valuations, weakening macro indicators and a less favorable policy backdrop. In a note published April 23, 2026, the bank’s equity-asymmetry framework flagged elevated downside risk and low upside potential after a sharp rebound since the March 30 lows. The S&P 500 has hit record highs and its forward P/E has moved above 21, reducing the case for adding risk. Goldman also cautioned that the market’s rally has been partly driven by a U.S.-Iran cease-fire and softer oil prices, leaving equities vulnerable to any renewed geopolitical escalation or spike in energy costs. Overall, the bank’s institutional outlook is cautious to bearish for near-term equity performance.