Goldman Sees Narrower S&P 500 Advance Despite Index Gains

Goldman Sachs warned in a client note that the S&P 500’s gains mask a narrower market advance. Artificial intelligence shares are supporting the index as fewer companies take part, the bank said.

Strategist Ben Snider said the median S&P 500 constituent is about 16% below its 52-week peak. Goldman’s investor sentiment gauge stood at negative 0.9, matching its March level.

The benchmark returned about 14% in 2026, while its forward price-to-earnings multiple fell to 19 from 22. Goldman attributed the lower valuation to higher interest rates and doubts about the durability of AI-related profit growth.

Goldman said its long-short value strategy had gained more than 25% since mid-2025, but could deliver smaller returns ahead. Snider said investors may need to look beyond the largest AI beneficiaries and assess companies’ longer-term growth prospects as macroeconomic uncertainty changes.