Goldman Sachs Soars 5.36% Pre-Market Despite Cautious Outlook

On May 12, 2025, Goldman Sachs experienced a significant pre-market rise of 5.36%, reflecting a strong start to the trading day.

Goldman Sachs' Chief Strategy Officer, David Kostin, has urged investors to remain cautious despite a strong first-quarter earnings season and positive trade negotiation signals. Kostin highlighted that while the S&P 500 index's earnings growth for the first quarter exceeded expectations, economic challenges and uncertainties surrounding trade policies could still pose risks to the market. He emphasized that while the strong earnings performance suggests short-term upside potential, Goldman Sachs' economists predict a slowdown in GDP growth for the second half of the year, which could limit the index's earnings growth to just 3% for 2025.

Kostin also noted that the "seven giants" of the tech sector—Apple, Microsoft, Google, Amazon, Nvidia, Meta Platforms, and Tesla—have been the primary drivers of earnings growth. These companies, with their substantial market capitalization and dominant positions in high-growth industries, have been key contributors to the performance of both the S&P 500 and Nasdaq indices. However, Kostin warned that the high concentration of market power in these few companies poses a risk to market stability.

In addition to the economic outlook, Kostin also addressed the potential impact of trade policies on the market. He cautioned that while many companies have maintained their earnings guidance, they have not fully accounted for the potential impact of tariffs. Kostin warned that supply chain disruptions and tariff-related risks could pose significant challenges in the coming months.