Banking giant warns the 2026 stock sell-off is not over

Market Performance and Investor Sentiment - The U.S. stock market experienced a significant one-session gain on February 6, with the S&P 500 recording its largest increase since May 2025, yet Goldman Sachs cautioned that investors are not fully secure [1] - The first week of February saw a drop that prompted trend-following algorithmic funds to continue selling equities, with potential sell-offs of approximately $33 billion if the downtrend resumes, and about $15.4 billion in a sideways market [3] Volatility and Market Risks - Goldman Sachs highlighted that thin liquidity and a predominance of net short positions could exacerbate market volatility and lead to substantial losses in the second week of February [4] - The January U.S. jobs report indicated a risk of a significant stock market sell-off, with 108,435 job cuts reported, marking a 118% increase compared to January 2025, the highest number of layoffs for the start of a year since 2009 [5][6] Impact of AI and Job Cuts - The job cuts in January are attributed to pressures from the AI boom and global trade disruptions, with major tech companies like Amazon, UPS, and Target implementing significant layoffs [6][7] - The AI sector's need to generate trillions in revenue by 2030 for investments to be viable is seen as unrealistic, with many recent investment agreements appearing to have faltered [9][10] Trade War and Economic Strain - President Trump's tariff war has led to instability, with reports indicating that 96% of added costs have been absorbed by American consumers, affecting their economic contributions [12] - The trade war's volatility may worsen if the U.S. Supreme Court rules against the tariffs, which could lead to a collapse of the policy [13]