Goldman Sachs: S&P 500 Bull Market Intact but Expect Choppier Path Ahead, Momentum Index Down 22% Since June

According to Goldman Sachs fund manager Tony Pasquariello, on July 8, the S&P 500 bull market remains intact but the market's character has shifted notably, with investors facing significantly choppier price action in coming months. The Goldman Sachs momentum strategy index has declined 22% from its June high, with volatility surging to near five-year levels, driven by concentrated positioning built during the first half's strong rally.

Passuariello highlighted that AI capital expenditure represents the most critical variable for market direction, with the upcoming second-quarter earnings season providing a key test. He expects cloud giants to prove they can adjust spending levels and inflect free cash flows upward while maintaining the integrity of their infrastructure ecosystems. Despite near-term volatility, he advised investors to maintain positions while trimming to highest-conviction holdings and selectively buying into any pullbacks in hedging tools.