As he notes, stock markets are displaying the same dangerous characteristics they showed before the Global Financial Crisis, therefore investors should expect a major correction in the immediate period ahead.
The warnings of Peter Oppenheimer, head of global equity strategy at Goldman Sachs, carry particular weight, especially since his unconventional forecasts have a strong historical record of success.
Specifically, in a note published on Wednesday 4/3, Oppenheimer warned that equity risk premia, a metric that measures how much additional return investors demand to hold stocks instead of more “safe assets”, “have declined sharply and now largely stand again at the levels they were at before the financial crisis”.
This signal, Oppenheimer wrote, has made stocks “more vulnerable to shocks” that could arise from competition in technology or from a deterioration in the combination of growth and inflation.
To be clearer, Oppenheimer is not predicting a bear market, but that the risks for a correction are high.
In addition, he pointed out that stock valuations are not elevated only in the United States, something that has been the case for many years, but in every region of the world “above their long term historical levels”. In other words, stocks are expensive globally and may correct.
A strategist who had predicted it
It is worth noting that Oppenheimer had already made a bold and insightful forecast since 2024, namely that American stocks are excessively expensive, urging investors to diversify.
This move paid off significantly, as European and Japanese markets surged while American technology stocks declined in the so called trade “sell America”.
In November 2025 he continued with a decade long forecast, according to which the S&P 500 index will deliver annual returns of only 6.5%, the lowest among major regions, while emerging markets will lead with returns of almost 11% annually.
He has also highlighted artificial intelligence as a potential area for bubble creation, drawing clear parallels with previous speculative cycles. (Of course, it is still too early to judge the accuracy of these forecasts.)
How these forecasts develop could influence the severity of any short term correction, as certain market signals resemble the crisis of 2007–08, although private sector balance sheets remain healthy across households, businesses and banks.
For this reason, many market observers compare the current situation more with the period of the dot-com bubble in the early 2000s.
Corporate earnings continue to provide a positive picture, with Goldman Sachs itself acknowledging that global earnings estimates have actually increased since the beginning of 2026, an unusual and historically positive signal.
In any case, Oppenheimer, writing together with his colleagues Sharon Bell, Guillaume Jaisson and Giovanni Ferrannini, described today’s combination of geopolitical uncertainty and market anxiety due to artificial intelligence as a “significant headwind for risk assets in the short term”.
Oppenheimer also noted that the behavior of cyclical stocks may increase risk, as sectors sensitive to economic fluctuations have significantly outperformed defensive sectors over the past year and now trade at approximately the same valuations.
This pricing dynamic leaves little margin of safety if investor confidence is shaken.
Any new shock in oil prices, disruption in trade or escalation in the Middle East could quickly erode it.
The historic weakening of technology
At the sector level, Oppenheimer highlights one of the most striking reversals in modern market history: Technology stocks have just gone through one of the weakest periods of relative performance compared with other sectors over the last 50 years.
This shift, driven by investor anxiety about capital expenditure plans in artificial intelligence and fears that software business models could face disruption, quickly reduced the valuation premium that the technology sector had long enjoyed.
In a striking reversal, American industrial stocks with high fixed asset intensity are now trading at a higher price to earnings ratio (P/E) than technology companies with low asset intensity.
Despite the increased risk of correction, Oppenheimer does not expect the market to enter a prolonged bear market.
The economists of Goldman Sachs forecast United States GDP growth of 2.8% this year, global corporate earnings estimates have actually increased since January, and private sector balance sheets, households, businesses and banks, remain sufficiently healthy to absorb potential shocks without causing systemic transmission of the crisis.
Oppenheimer has also pointed out in the past that most geopolitical shocks cause an average correction of around 6% in the S&P 500 index within approximately 18 days before the market stabilizes.
Ultimately, Oppenheimer recommended that investors maintain broad diversification at the geographical level, across sectors and across investment factors, the same strategy he has been proposing for more than a year and which has already proven effective.
“We believe that the risks of correction are high given today’s valuations,” Oppenheimer wrote, “but we expect that this will create a buying opportunity with relatively low risk of a more prolonged and deep bear market.”
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