tl;dr
Goldman Sachs forecasts continued stock market rallies supported by a positive global economic outlook. Factors driving growth include Germany's fiscal expansion from defense spending and the "big beautiful bill," which may boost domestic credit, especially alongside advances in AI and robotics. Chi...
Financial services giant Goldman Sachs is forecasting more stock market rallies, buoyed by a promising global economic outlook. In an interview on the Goldman Sachs YouTube channel, Anshul Sehgal, co-head of fixed income, currency, and commodities, highlighted several positive factors supporting market growth. Key contributors include fiscal expansion in Germany driven by defense spending and the "big beautiful bill," which could trigger a domestic credit boom especially when paired with advancements in artificial intelligence (AI) and robotics.
Sehgal emphasized that China remains a dominant player in AI and robotics, with ongoing expansion in both credit and fiscal policies. This global synergy, he suggests, is likely to fuel asset price appreciation over the intermediate term, signaling a bullish environment for investors worldwide.
However, Sehgal cautioned that tariffs may cause a near-term setback by imposing a one-time tax burden estimated between $250 billion to $300 billion annually, roughly 1% of GDP. Depending on whether corporations or consumers absorb these costs, there could be short-term impacts on stock valuations or consumer spending.
Despite this hurdle, Sehgal remains optimistic about early 2026 and beyond, pointing to several catalysts such as bonus depreciation measures in the big beautiful bill, social security tax benefits, and reduced taxes on tips. Together, these factors are positioned to strengthen the US economy and sustain upward momentum in financial markets.