Where to invest to capture the broadening stock market rally in 2026, according to Goldman Sachs

Core Viewpoint - Goldman Sachs Asset Management identifies several market opportunities for the upcoming year that extend beyond the AI sector, suggesting a broadening rally in various market segments [1][2]. Group 1: Investment Opportunities - Small-cap companies are positioned to benefit from the AI boom, focusing on niche markets rather than competing directly with larger firms, with the Russell 2000 index up 11.3% year-to-date [3]. - The healthcare sector is experiencing growth partly due to AI hype, with the iShares US Healthcare ETF increasing by 14.5% year-to-date, indicating investment potential in this area [4]. - International stocks have outperformed the US equity market this year, with the Vanguard Total International Stock Index Fund ETF rising by 26.8% year-to-date, suggesting a favorable outlook for international equities [5][6]. Group 2: Market Outlook - The overall market outlook for risk assets appears strong, supported by factors such as the Federal Reserve's interest rate cuts, which are expected to benefit various sectors [2][7]. - Goldman Sachs anticipates that the stock market rally will continue to broaden across multiple sectors in the next year, recommending diversification into small caps, healthcare, and international stocks [7].