US Stock Market Influenced by AI Enthusiasm
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 6 days ago
0mins
Source: Fool
- Market Performance Review: Over the past year, the US stock market has performed well, with the S&P 500 and Nasdaq Composite rising 20% and 27% respectively since June 2025, driven by strong investor enthusiasm for artificial intelligence stocks.
- Rate Hike Expectations: Federal Reserve officials now anticipate at least one interest rate increase in 2026, marking the beginning of the fifth rate-increase cycle since 1999, which historically coincides with bear markets, potentially putting pressure on stock prices.
- Inflation Impact Analysis: Due to accelerating inflation, market expectations for future interest rates have shifted, with 50% of Fed officials now believing a 25 basis point hike will be necessary in 2026, a significant increase from zero in March, reflecting growing concerns about the economic outlook.
- Volatility Risk: Should the Fed raise rates this year, it would initiate a new tightening cycle; historical data shows that the S&P 500 and Nasdaq Composite typically decline by an average of 10% and 15% within three months following the first rate hike, indicating that investors should prepare for potential market volatility.
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Analyst Views on GS
Wall Street analysts forecast GS stock price to fall
12 Analyst Rating
5 Buy
7 Hold
0 Sell
Moderate Buy
Current: 1021.000
Low
604.00
Averages
951.45
High
1100
Current: 1021.000
Low
604.00
Averages
951.45
High
1100
About GS
The Goldman Sachs Group, Inc. is a global financial institution that delivers a range of financial services to a large and diversified client base that includes corporations, financial institutions, governments and individuals. Its segments include Global Banking & Markets, Asset & Wealth Management and Platform Solutions. The Global Banking & Markets segment offers a range of services, including financing, advisory services, risk distribution, and hedging for its institutional and corporate clients. It facilitates client transactions and makes markets in fixed income, equity, currency and commodity products. The Asset & Wealth Management segment manages assets and offers investment products across all asset classes to a diverse set of clients. It also provides investing and wealth advisory solutions. The Platform Solutions segment includes consumer platforms, such as partnerships offering credit cards and point-of-sale financing, and transaction banking and other platform businesses.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Current CD Rates: Short-term CDs (6 to 12 months) currently offer rates around 4% APY, with the highest at 4.10% for a 14-month CD from Marcus by Goldman Sachs, indicating opportunities for competitive returns despite declining rates.
- Historical Rate Trends: Since 2009, CD rates have significantly decreased, particularly after the 2008 financial crisis when the average one-year CD rate fell to about 1%, reflecting the impact of economic slowdown and Federal Reserve rate cuts.
- Impact of Economic Policy: The COVID-19 pandemic in 2020 led to emergency rate cuts by the Fed, resulting in record low CD rates; however, subsequent inflation prompted the Fed to hike rates 11 times between 2022 and 2023, driving CD rates higher.
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See More
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- Strategic Fit: Vertex CEO Reshma Kewalramani praised the acquisition as an excellent strategic fit, as Crinetics focuses on serious diseases in specialty markets with significant unmet needs, and it is expected to contribute revenue immediately through the ongoing launch of the Palsonify medicine.
- Revenue Growth Potential: The growing demand for therapeutics in endocrine diseases provides Vertex with a clear runway for double-digit revenue growth in the coming years, with Crinetics in the portfolio further solidifying its market position.
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See More
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- Massive Contract Expansion: CoreWeave expanded its agreement with Meta in April 2023 to provide cloud computing capacity through 2032, valued at $21 billion, while Nebius announced in March it would provide $12 billion in cloud capacity, showcasing the strong collaborative potential in the AI data center sector.
- Sustained Demand Growth: Despite the competitive threat from Meta, demand for AI data centers from CoreWeave and Nebius remains robust, with CoreWeave noting that its 2026 capacity is largely sold out and 30% of its $99.4 billion revenue backlog comes from foundational AI labs, indicating urgent market demand for their services.
- Investment Opportunity Emerges: Although Meta's plans could impact CoreWeave and Nebius, the demand for AI data centers far exceeds supply, making the current stock price pullback a buying opportunity, particularly as CoreWeave's price-to-sales ratio is only 6.6, indicating potential investment value.
See More
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- Increased Competition: Meta's plan to enter the AI data center market led to a 14% and 17% drop in CoreWeave and Nebius shares respectively, indicating market concerns over new competition that could impact future revenue growth for both companies.
- Shifting Customer Dynamics: CoreWeave's agreement with Meta has been extended to 2032, valued at $21 billion, while Nebius has committed to providing $12 billion in cloud computing capacity, highlighting the importance of their business relationships despite increased competition.
- Strong Demand Continues: CoreWeave's AI cloud platform demand is nearing saturation for 2026, with 30% of its $99.4 billion revenue backlog coming from foundational AI labs, showcasing its robust market position and growth potential.
- Optimistic Industry Outlook: According to Goldman Sachs, U.S. data center power demand is projected to double to 66GW by 2027, indicating that the demand for AI data centers will continue to grow, positioning CoreWeave and Nebius to benefit from this trend.
See More
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- Market Performance Comparison: While the Nasdaq Composite has gained over 12% this year, China's ChiNext index has surged more than 20%, indicating strong short-term performance of Chinese tech stocks; however, the overall MSCI China index has fallen over 10%, reflecting market uncertainty.
- Policy Support and Challenges: Beijing has rolled out policies to support domestic AI development amid U.S. restrictions on high-end technology, yet the unclear profitability of companies in the context of slower economic growth and fierce competition highlights market complexities.
- Investment Opportunities: BlackRock analysts see potential in physical AI, emphasizing the integration of AI technology into hardware, while recommending stocks exposed to scarce industry inputs, showcasing a focus on infrastructure investments.
See More
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