Published by Global Banking & Finance Review®
Posted on March 4, 2026
2 min readLast updated: April 2, 2026
Add as preferred source on GoogleGoldman Sachs warns of elevated near‑term correction risks in global equities—driven by geopolitics, AI disruption, and stretched valuations—yet sees limited chance of a prolonged bear market thanks to strong earnings, economic resilience, and diversification benefits.
March 4 (Reuters) - Goldman Sachs sees "correction risks" to global stocks in the near term due to worries about geopolitics, AI disruption and elevated valuations, though the Wall Street bank sees limited room for a bear market.
"We see correction risks as high given current valuations, but expect this to present a buying opportunity with relatively low risk of a more protracted and deep bear market," Peter Oppenheimer, chief global equities strategist at Goldman Sachs, said in a note on Wednesday.
A bear market is confirmed when an index closes at least 20% below its most recent record high finish, according to a widely used definition. It confirms a correction if the index closes 10% or more below that level.
Global equities have been rattled since the start of the year by fears of AI disruption to businesses, massive AI spending from Big Tech and most recently, the Middle East conflict.
The U.S.-Israeli air war against Iran has heightened fears of an oil price shock, higher inflation and economic uncertainty. That, combined with elevated equity valuations, has prompted investors to shun risky assets in favor of safer ones.
The MSCI's All Country World Index, a gauge for global equities performance, declined for a fifth straight session on Wednesday, and was down about 4% from its record high. The benchmark S&P 500 is down 0.4% so far this year.
Robust earnings growth, particularly in the U.S. and emerging markets, and potential for strong economic growth will keep risks low for a deeper bear market, Oppenheimer said.
"We continue to recommend broad geographical, factor and sector diversification as a way of improving risk adjusted returns," Goldman added.
(Reporting by Kanchana Chakravarty in Bengaluru; Editing by Devika Syamnath)
Goldman Sachs cites elevated valuations, geopolitical tensions, and AI disruption as reasons for increased correction risks in global equities.
A correction is when an index falls 10% or more from its recent high, while a bear market is a decline of at least 20%.
Events like the U.S.-Israeli air war against Iran and fears of AI disruption have increased market volatility and driven investors to safer assets.
No, Goldman Sachs expects that while correction risks are high, the chances of a prolonged bear market remain low due to robust earnings and economic growth.
Goldman Sachs recommends diversification by geography, factor, and sector to improve risk-adjusted returns.
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