Goldman Sachs warns of a "hidden bear market" in US stocks, with about 60% of S&P 500 constituents already in a bear market.

November 3 - The S&P 500 index is only about 3% away from its latest all-time high, but approximately 60% of its constituent stocks have already fallen into bear market territory. Goldman Sachs Group trader Bobby Molavi pointed out that this market landscape is quite astonishing. He stated that the so-called "strangeness" lies in the fact that the capital expenditures of tech giants driving the rise of AI-related stocks, as well as the companies receiving these investments, have seen their related stocks decline simultaneously.

Molavi, head of execution services for Goldman Sachs in the Europe, Middle East and Africa region, wrote in a client report: "I don't understand why both sides are being punished by the market at the same time, especially when the basic expectation remains that AI will change everything." He described the current market landscape as a "hidden bear market." As investors withdraw from related stocks due to concerns about the sustainability of massive AI spending, large-scale rotation has occurred in the market, and tech stocks have been hit hard in recent weeks. On the other hand, most S&P 500 constituents have still risen over the past month, with capital shifting from crowded trading areas to defensive sectors and previously underallocated areas.