Institutional Investors 51% Bullish on S&P 500, Dollar Bearishness Hits 7:1 Ratio: Goldman Sachs

Institutional investors are increasingly bullish on U.S. equities while expressing heightened bearishness toward the dollar, according to a Goldman Sachs survey highlighting a stark divergence in market sentiment. The report, released amid U.S. fiscal challenges, reveals 51% of respondents view the S&P 500 favorably, with 32% taking a bearish stance. This marks the third time in 9.5 years that such a pronounced disconnect between equity optimism and dollar pessimism has emerged [1]. The survey singles out the "Magnificent Seven"—Tesla, Meta, Alphabet, Amazon, Apple, Microsoft, and Nvidia—as focal points of confidence, with these tech giants driving a structural shift toward growth-oriented assets [1].

The dollar’s bearish sentiment has surged to a 7:1 ratio of bears to bulls, a statistic attributed to Goldman managing director Oscar Östlund, who described the shift as a "paradigm change" over recent months [1]. Östlund warned that the one-sided equity bullishness could signal market fragility, noting, "A very strong consensus is not a reason for the market to turn, but it makes for a market that’s susceptible to relatively sudden changes based on even minor catalysts." This caution aligns with broader concerns about concentrated positions in high-growth sectors and the potential for volatility triggered by macroeconomic catalysts [1].

The survey underscores a historical pattern: only three instances in the past decade have seen such a stark divergence between equity and dollar sentiment. Analysts interpret this as a reflection of evolving priorities, with investors prioritizing tech-led growth over traditional safe havens like the dollar. However, the report refrains from forecasting specific market outcomes, focusing instead on documenting current sentiment [1]. Short interest in Nasdaq securities has also declined, further signaling institutional confidence in equities [3].

The dollar’s waning appeal is tied to persistent fiscal concerns, including rising U.S. debt and geopolitical uncertainties, which amplify questions about its long-term role as a global reserve asset. Meanwhile, the S&P 500’s 51% bullish rating contrasts with the historically low 32% bearish view, illustrating a market leaning toward risk-on positioning [1]. This dynamic raises questions about the sustainability of current equity valuations and the potential for a reversal if macroeconomic conditions deteriorate.

Goldman’s findings highlight the interplay between macroeconomic narratives and institutional decision-making. The dollar’s struggles reflect broader debates over fiscal sustainability, while equities benefit from a shift toward high-growth, innovation-driven sectors. The report serves as a barometer of investor priorities, emphasizing the need for vigilance in markets where consensus-driven optimism may mask underlying vulnerabilities [1].

Source:

[1] [Institutional Investors Express Rising Confidence in Stocks Amid Increased Bearishness on the US Dollar: Goldman Sachs Survey](https://dailyhodl.com/2025/07/26/institutional-investors-express-rising-confidence-in-stocks-amid-increased-bearishness-on-the-us-dollar-goldman-sachs-survey/)

[2] [Can the US Stock Rally Persist as the Dollar Declines?](https://www.goldmansachs.com/insights/articles/can-us-stock-rally-persist-as-dollar-declines)

[3] [Press Releases](https://www.quiverquant.com/news/category/press_release_summary)