Goldman Sachs Warns Valuations Are 'Historically High,' But Bear Market Is Unlikely In 2026 - SPDR S&P 500 (ARCA:SPY)

Group 1 - Global equities are projected to deliver total returns of 11% over the next 12 months, driven by robust earnings growth that is expected to outweigh risks associated with historically high stock valuations [1] - Goldman Sachs forecasts that 2026 will be defined by fundamental profit growth rather than expanding price-to-earnings multiples, with equity prices expected to climb 9% globally [2] - The report indicates that while valuations are at historically high levels across major regions, high prices alone are insufficient to trigger a market crash [3] Group 2 - Significant bear markets rarely occur without an economic recession, and the global economy is poised for continued expansion, supported by expected modest easing from the Federal Reserve [4] - Investors are advised to look beyond U.S. borders for diversification, as geographic diversification rewarded investors in 2025, with U.S. equities underperforming compared to Europe and Asia [5] - As the gap in growth-adjusted valuations between the U.S. and the rest of the world narrows, opportunities in emerging markets and sectors benefiting from AI capital expenditure are encouraged [6] Group 3 - Concerns regarding a tech bubble are addressed, concluding that current tech valuations, while high, are supported by superior profit growth and remain below the extreme disparities seen during the dot-com peak of 2000 [7] - The S&P 500 and Dow Jones indices have gained 1.44% and 3.09% year-to-date, while the Nasdaq 100 index has risen by 1.03% in the same period [8]