Goldman Sachs' 9-Indicator Assessment: S&P 500 Shows 66% Bubble Risk Percentile, Below 2000-2021 Peaks

According to Goldman Sachs research reported by MarketWatch, the bank's latest 9-indicator assessment of stock market conditions shows the S&P 500 has not yet exhibited the extreme speculation typical of the 2000 dot-com bubble or 2021 post-pandemic rally. The 9 indicators—covering share price momentum, trading activity, investor sentiment, and corporate behavior—currently averaged at the 66th percentile, well below the 99th percentile during 2000-2001 and 92nd percentile in 2021.

Strategist Ben Snider noted that while some metrics remain elevated, the recent S&P 500 rally since late March has been primarily driven by corporate earnings improvements rather than speculative excess. S&P 500 companies' earnings-per-share estimates rose 16%, exceeding the index's 8% gain and suggesting fundamental support. However, short interest on S&P 500 constituents reached 3.2% on average—the highest level since the 2008 financial crisis—indicating investors still harbor significant skepticism about further gains.