Goldman Sees 8-Point S&P EPS Gain, Warns on Oil and Yield Risks
Goldman Sachs says 5.9% global GDP growth this year has boosted S&P 500 EPS outlook for 2026–27 by eight percentage points and powered a 10% year-to-date rally led by technology, media and telecom. The bank warns rising term premiums and oil disruptions could trigger bond and equity volatility.
1. Robust Earnings Growth Drives Markets
Goldman Sachs analysts attribute the global equity rally to robust corporate earnings growth, citing 5.9% global GDP expansion and AI-driven capital expenditure as key drivers that raised bottom-up S&P 500 EPS estimates for 2026 and 2027 by eight percentage points.
2. Rally Concentrated in Tech, Media and Telecom
The S&P 500 has surged 10% year-to-date, with technology, media and telecom sectors contributing 85% of gains, while markets in chip-exporting regions like Korea have climbed nearly 80% on booming demand.
3. Value and Risks in 30-Year Treasuries
Analysts see some valuation in 30-year Treasury yields hovering near 5.14%, but warn that rising term premiums driven by increased government borrowing could pressure longer-dated debt markets.
4. Potential Volatility from Oil Disruptions
The bank cautions that ongoing oil supply disruptions and rising inflation expectations could compress equity risk premia further and trigger volatility in both bond and equity markets.