Goldman Sachs sees risks for US stock market despite current positive dynamics

According to Goldman Sachs strategists, the situation on the US stock market now looks encouraging. Expectations of the Fed's monetary policy easing and stable macroeconomic background add positivity to the investors’ sentiment. However, as the experts warn, US stocks growth may be hampered later this year.

To support their point of view, the strategists drew attention to a possible deterioration in the ratio of GDP growth and inflation in the United States in the second half of the year. Now, market sentiment implies stable economic growth. However, President Donald Trump's tariffs could still lead to a slowdown in the US economy, the bank said.

Strategists forecast a somewhat stagflationary macroeconomic backdrop in the US for the rest of the year, characterized by higher inflation with sluggish GDP growth. Also, the acceleration of price growth may lead to an increase in interest rates by the country's central bank. At the moment, such a scenario is unlikely. Nevertheless, as Goldman Sachs warns, the investors should not rule out this possibility.

At the same time, the increased risk appetite of investors may lead to greater disappointment later. The continued weakening of the US dollar also poses an additional threat, the experts summarized.