Goldman Sachs' latest report believes that US stocks will usher in a wave of "profit boom" in 2026, and investment priorities will also change.
Over the past few years, the market has been buzzing with tech giants in the field of artificial intelligence (AI). However, Goldman Sachs predicts that as the U.S. economy accelerates in 2026, cyclical sectors such as energy, finance, industrials, and materials (that is, industries that perform better in good times) will become new opportunities.
Signals from the derivatives market show that the "linkage" between individual U.S. stocks will drop to an all-time low in 2026 - that is, stock performance will be more differentiated. At this time, choosing the right stocks is more important than blindly buying the market, and "careful selection" will become the mainstream strategy.
Goldman Sachs pointed out that cyclical stocks have recently outperformed defensive stocks (such as utilities and consumer staples) for 14 consecutive days, which is the longest winning streak in 15 years, indicating that the style switch has begun.
But interestingly, the current overall market pricing only reflects about 2% of economic growth expectations, while Goldman Sachs' own forecast is 2.5%. This means that investors are not fully aware of the upside brought about by the economic acceleration in 2026, and the opportunities may be underestimated.
Cyclical sector earnings growth will lead in 2026
Goldman Sachs' latest report points out that in 2026, cyclical sectors will become the "leader" of U.S. stock earnings growth.
Which industries are most optimistic?
Industrial (e.g. manufacturing, machinery) Materials (e.g., steel, chemicals) Consumer discretionary goods (e.g., automobiles, luxury goods, travel)
These industries have one thing in common: when the economy improves, they make more. Goldman Sachs expects the U.S. economy to accelerate growth in 2026, which just gives them strong momentum.
Specifically, the profit growth rate:
Real estate companies: EPS growth jumped from 5% this year to 15% next year Consumer discretionary: from 3% to 7% Industrial enterprises: from 4% to 15%
What about technology stocks? The rally may slow. The "Big Seven" represented by Nvidia and others have risen very sharply this year, but Goldman Sachs reminds that most of the benefits brought by AI may have been digested by the market in advance.
Data shows that earnings growth in the information technology sector will slow slightly from 26% in 2025 to 24% in 2026 – still good, but no longer the fastest-growing.
Although many investors are optimistic about the economic outlook, Goldman Sachs believes that everyone has not fully anticipated the upcoming rebound in cyclical stocks, which means that now may be a good time to lay out.
Very low correlation indicates a "stock picker market"
John Marshall, head of derivatives research at Goldman Sachs, pointed out that in 2026, US stocks will enter an era of "stock selection is king". By analyzing options data from the S&P 500 and Nasdaq 100, he found that investors expect the "synchronicity" between individual stocks to drop to an all-time low in 2026.
Specifically, the correlation between S&P 500 constituents may be only 23% (lower indicates more inconsistent stock rises and falls).
What does this mean?
In the past few years, many stocks have often "risen and fallen together", especially driven by the AI boom, technology stocks have risen together. But by 2026, this will change:
Some companies have benefited from AI, and their stock prices have risen sharply; Others may be under pressure from competition or cost pressures brought by AI; In the same industry, the performance can also be very different. Coupled with the market's unified response to macro factors such as economic recovery and interest rate changes, the stock trend will become more and more "separate".
The impact on investors?
It may not be enough to buy indices (such as the S&P 500 ETF) - because the index rises and falls, and the overall return will be flattened; The key to real money has become "choosing the right stocks": who has real profits and unique advantages can outperform.
The seasonal rebound window at the end of the year opens
The Goldman Sachs analyst team (led by Gail Hafif) pointed out that US stocks are entering the best "year-end window" of the year. Although the S&P 500 index has recently pulled back and has not yet hit a new high (currently 2.6% below its all-time high), and the market is still debating whether AI is overspeculated, historical data supports the law of "year-end rise".
Specifically:
Throughout December, the S&P 500 rose by an average of about 1.98%; In the last two weeks from December 17 to 31, the average increase was 1.77%.
This means that even if there is no surge, the end of the year will usually rise moderately, bringing good short-term opportunities for investors.
Goldman Sachs believes that there is still room for upside in the current market position, and the last two weeks are worth paying attention to - not necessarily big profits, but there is a high probability of "small red envelopes".
From "chasing AI" to "selecting cycles + fine stocks"
For U.S. stock investors:
reduce over-dependence on the "Big Seven", and control positions even if they are held; Additional cycle sectors: industrial (such as Caterpillar), materials (such as Freeport-McMoRan), consumer discretionary (such as Nike, Tesla); Pay attention to the "profit inflection point" companies: second-tier leaders whose profits will be under pressure in 2025 and are expected to reverse in 2026.
For A-share/Hong Kong stock investors:
U.S. cyclical stocks picked up - global risk appetite picked up - good for China's export chain (machinery, electronics, auto parts); We can pay attention to manufacturing enterprises with strong overseas capabilities and benefiting from the recovery of global capital expenditure.
For Quant/ETF Investors:
Be wary of the "passivation" of broad-based indices and consider industry rotation ETFs (such as XLI Industrial, XLY Consumer); Use options strategies to capture volatility opportunities with low correlation (e.g., straddle portfolios, individual stock spreads).
