Goldman Sachs believes that the recent 5% pullback in the US stock market is a typical year-end seasonal fluctuation in the AI cycle, rather than an abnormal signal indicating the end of the uptrend. Goldman Sachs traders pointed out that despite the market experiencing a pullback, there is still room for upside before the end of the year, as seasonal factors, the early stage of the AI investment cycle, and relatively light institutional positions work together to potentially push the index higher. According to Shreeti Kapa, a fixed income, foreign exchange, and commodities trader at Goldman Sachs, a 5% drop at this time of year is a normal occurrence in this cycle. She believes that although the market has experienced a strong rebound since the low point in April, overall it has not been "excessive."
