Report published September 25, 2026

What Equity Investors Are Paying for Today: Goldman Sachs US Equity Strategy

Goldman Sachs · September 25, 2026

Despite strong headline index performance, US equity market breadth has deteriorated to Dot-Com Bubble lows and forward P/E multiples have compressed to 19x amid rising rates and concerns over AI-driven over-earning. Investors are prioritizing 3-year sales durability over near-term earnings, suggesting alpha will come from differentiated views on long-term growth.

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Finvaulta summarizes Goldman Sachs's analysis. Attribute opinions, forecasts, time-sensitive values, and chronology to the issuer and report date; do not treat this page as an independent verification or a current market-data source.

Key Takeaways

1.Macro uncertainty has depressed equity positioning to -0.9 and narrowed market breadth to Dot-Com Bubble lows, creating room for catch-up potential if conditions ease.
2.The S&P 500 forward P/E multiple has compressed from 22x to 19x due to higher interest rates and skepticism that corporate earnings boosted by AI capex are over-earning.
3.Corporate profitability explains a multi-decade high share of sector valuation variation, while narrowing valuation dispersion and near-trend GDP growth point to a weaker outlook for the Value factor.

How investors value US equities today
S&P 500 earnings and return forecasts
Biggest stock movers this week
Sentiment and flows
Economic growth
Interest rates and financial conditions
Market breadth and concentration
Correlation and volatility
IPO Barometer and mutual fund performance
Earnings growth
Valuations
YTD absolute and risk-adjusted returns
Sector returns, earnings, and valuations
Thematic baskets
Factors
Goldman Sachs global macro research cross-asset forecasts

Report data

Exhibit 2: Market breadth has recently plunged — as of September 24, 2026.

Metric	Estimate	Context
GS US Equity Sentiment Indicator	-0.9 index	Matches the market lows reached in March 2026.
S&P 500 Forward 12-Month P/E	19 x	Matches 10-year average P/E after falling from 22x earlier in the year.
Hyperscaler Capex	800 billion USD	Capex flowing to semiconductor and AI infrastructure profits, driving ~50% of S&P 500 EPS growth.
US Equity Market Free Cash Flow Yield	3.3%	Below the historical median of 4.4% but comparable to recent decades.
Real 10-Year US Treasury Yield Monthly Change	53 bp	Crossed the two standard deviation speed limit associated with equity headwinds.

Source: Goldman Sachs Global Investment Research; FactSet, Goldman Sachs Global Investment Research; US Bureau of Economic Analysis (BEA), Compustat, Goldman Sachs Global Investment Research. This is a dated model snapshot, not a live forecast.