Goldman Sachs CEO David Solomon Predicts Key Market and Economic Changes

Goldman Sachs CEO David Solomon shared his insights on the U.S. economy and stock market during a recent appearance at Italian Tech Week. His comments reflect a cautious optimism, despite some evident risks facing investors. Solomon emphasized that while he feels confident about the market environment, there are important factors that require close attention.

Market Predictions from David Solomon

Here are Solomon’s key predictions for the future of markets and the economy:

1. Potential Stock Market Drawdown

According to Solomon, the stock market historically shows a tendency to “run ahead” when new technologies create excitement. He noted the recent performance of the S&P 500, which has risen by 15% year-to-date after recovering from earlier lows.

• Solomon predicts a possible drawdown within the next 12 to 24 months.
• A report from Goldman Sachs suggests the S&P 500 faces over a 20% chance of a drawdown in the next year.

2. Winners and Losers in the Bull Market

Solomon compared the current market dynamics to the internet boom of the late 1990s. He indicated that, just as in past cycles, the current bull market would yield both successful and unsuccessful investments.

• Some companies will flourish, while others may falter.
• This outcome is typical of significant investment cycles.

3. Strong Economic Outlook

Solomon is optimistic about the U.S. economy, predicting growth to accelerate by 2026. He attributes this expectation to robust fiscal stimulus and extensive infrastructure spending.

• The economy grew by 3.8% in Q2 of this year.
• Future GDP growth may stabilize just below 2%, which Solomon believes indicates a healthy economy.

He cautioned, however, that attention should be paid to labor market trends and inflation impacts stemming from tariffs.

4. Increase in Dealmaking Activity

Looking ahead, Solomon anticipates a significant year for mergers and acquisitions in 2026. He cited decreasing regulatory constraints and corporate strategies aimed at improving competitiveness as driving factors.

• The dollar value of M&As surged by 29% year-over-year in 2025.
• The number of deals increased by 8%, with expectations for a further 15% rise next year.

In conclusion, while David Solomon remains confident about market developments, he urges investors to stay vigilant regarding potential risks and shifts in economic indicators. The insights shared at Italian Tech Week lay the groundwork for understanding upcoming market trends and economic conditions.