Global Market Views Same Macro, Different Marks

Economics Research 10 August 2026 | 10:51AM EDT

Global Market Views: Same Macro, Different Marks

1. Three cross-currents shape the summer. July saw turbulent price action across Dominic Wilson | equities, rates, commodities and currencies. On the macro front, in addition to the Goldman Sachs & Co. LLC renewed escalation in the Iran war and oil price increases, the market also grappled Kamakshya Trivedi with volatility around the near-term Fed policy path, and the long-end response to | those shifts. On the micro side, worries about aspects of the AI trade have again Goldman Sachs International

been centre stage, with pressure particularly focused on leveraged holdings in the semiconductor space. Our modal views on all three fronts—oil, rates and AI—are still mostly benign. While we take no view on the trajectory of the Iran war, there appears to be little appetite on either side for a major escalation, which should keep energy prices bounded; we expect the Fed to stay on hold given the improvements in core inflation; and, coupled with cleaner positioning, a stellar earnings season should keep deeper AI worries at bay. Along that path, equities should be able to push higher still and contained macro volatility should support carry strategies. But if market pricing moves too far the other way along any of those dimensions, some of those worries can easily resurface. In particular, if growth is firm and equities rise further, it is easy to see long-end yields breaking higher and becoming more of a speed limit for markets.

Exhibit 1: A hawkish policy shock and some growth worry in July, but that has reversed

Index, Aug. 1, 2025 = 0 Index, Aug.1, 2025 = 0 12 12 Positive growth shock 10 Cumulative US growth shocks 10 Hawkish policy shock Cumulative US policy shocks 8 8

-6 -6 Negative growth shock -8 Dovish policy shock -8

-10 -10 Aug-25 Oct-25 Dec-25 Feb-26 Apr-26 Jun-26 Aug-26

Source: Goldman Sachs Global Investment Research

2. A better setup in August. There has already been a sharp bounce back across risk assets in August, and we see scope for that to extend as the market shifts back

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Goldman Sachs Global Market Views

towards our benign modal views on all three fronts. The message from the earnings season so far suggests that the AI spending boom looks to be continuing, and that earnings growth, both inside the AI complex and outside it, remains remarkably solid. It is also possible that some of the most acute pressure in this space reflected distressed unwinds of leveraged positions as much as it did tangible concerns. At any rate, August has kicked off with cleaner positioning and considerably cheaper valuations in pockets of the AI ecosystem. On Fed policy as well, hawkish risks are now well-socialised, including in market pricing, even though core inflation has come in softer, and our US team expects further inflation improvement through the year. If oil price tails also remain contained and the Strait re-opens, that sets up a path where there is scope to price relief in front-end rates and risk markets.

Exhibit 2: Leveraged ETF positions in US / Asia have declined meaningfully from highs, but not fully cleared

75 US Tech South Korea & Taiwan (RHS) 70 90 65

15 0 Jan-24 May-24 Sep-24 Jan-25 May-25 Sep-25 Jan-26 May-26

Universe excluding US ex-Tech and inversed exposed ETFs.

Source: EPFR, Goldman Sachs Global Investment Research

3. Risks remain on all three axes, but were better reflected through July. On each of these fronts, real risks remain. A US-Iran deal again seems closer at hand, but it is hard to have confidence yet in a lasting resolution. The Fed could easily decide to hike if inflation proves stickier than we expect. Longer-dated yields could push higher, particularly if nominal growth remains robust. And the amount of value added to AI-related equities is large enough that there is still vulnerability in equity markets to anything that challenges the more optimistic path. What is different in the market set-up heading into August versus…