Midday Market Intelligence august

Equity Research 3 August 2026 | 3:22PM EDT

Midday Market Intelligence: august

US stocks are trading definitively higher on Monday, led by Mega Cap Tech strength, Sarah Herr | as markets lean back into growth as the momentum trade resumes and geopolitical Goldman Sachs & Co. LLC

concerns recede. Chris Hussey | Goldman Sachs & Co. LLC

summer refrain Kshitij Garg | Markets are leaning back into growth on Monday, reflecting the potential Goldman Sachs India SPL resurrection of the momentum trade, or maybe a renewed preference for growth amid signs the conflict in the Middle East may be edging towards a resolution. Oil and rates both receded today, further supporting the outperformance of longer-duration growth stocks. Of course, today’s price action — and its potential drivers — have become a somewhat familiar tune over the past few months, and AI-driven volatility could very well continue. Ben Snider discussed this dynamic in Friday’s US Weekly Kickstart, “Q2 2026 mid-season earnings update,” highlighting that AI stock volatility during the past week has continued to follow the typical historical pattern following sharp Momentum rallies. And while earnings season does suggest that the fundamentals powering this bull market remain strong, the debate about hyperscaler capex and returns on all of that investment suggest AI-driven volatility may endure.

Specifically, reports from the hyperscalers this quarter signaled rising capex spending and increasing need for external financing. Joseph Briggs also weighs in on AI investment in yesterday’s Global Economics Analyst, “Assessing the Current Pace of AI Investment.” Bottom line: we look for $1tn in global AI investment this year, and $581bn in the US, above the commonly cited hyperscaler capex figure because it adds private and foreign companies and better allocates spending geographically — further emphasizing the growing complexity of the amount and mix of the investment needed to meet the data centers, power, compute, infrastructure, and more that AI demands. On the plus side, results from the hyperscalers last week do show growing evidence of return on AI investments, something Amanda Lynam, Eric Sheridan, and Gabriela Borges discuss in a fresh podcast, “Research Unplugged: Funding AI: Framing Scale, Scope & Mix.”

Finally, on the data front, this morning’s ISM manufacturing survey came in above expectations in July, reaching its highest level since May 2022 (see “USA: ISM Manufacturing Above Expectations; Construction Spending Declines From Downwardly-Revised Level”). Notably, the composition of the report was strong, with increases in the new orders, production and employment components. Both the ISM Manufacturing survey and the S&P Global manufacturing survey reinforced the

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Goldman Sachs Midday Market Intelligence

strong message from our broader manufacturing survey tracker. We left our 3Q GDP tracking estimate unchanged at +2.4% (quarter-over-quarter annualized). We launched our past-quarter tracking estimate at +1.5%, in line with the advance release.

Chart of the Day Peter Oppenheimer highlights how the reversal of the momentum trade, plus shifts in country and sector leadership, are creating alpha opportunities across all major regions in a fresh Global Strategy Views overnight, “Momentum, rotation and the value in growth.” For example, the IT sector has continued to enjoy the strongest earnings growth this year and has seen the biggest de-rating, whereas Energy has performed better but seen lower earnings growth. The opportunity to selectively find value in growth areas is rising.

Exhibit 1: Strong earnings growth has not prevented a de-rating in Technology…