Tony Pasquariello, head of hedge fund coverage at Goldman Sachs, stated in his latest client report that the current rally in US equities is "basically one big trade"—artificial intelligence—and expressed concerns about market concentration risk.

Goldman Sachs data shows that the S&P 500 index briefly touched a new historical high of 7818 points this week, but approximately one-sixth of its constituent stocks have retreated by over 50% from their peaks. Over the past three months, about 45% of S&P 500 constituents have shown a negative correlation with the index, a new historical high. Since August 27, the S&P 500 as a whole has risen by 1.28%, while the "S&P 500 ex-AI" (excluding AI-related stocks) has fallen by 5.19%. In September, technology stocks were the only sector that hedge funds net bought, with the largest buying volume since February 2025. The "Mag 7" net exposure accounts for approximately 22% of total US equity exposure, and semiconductor positions account for 12%. Goldman Sachs expects that 68% of the S&P 500's earnings growth this quarter will be contributed by the top 10 contributors, with Micron and NVIDIA alone accounting for half. Pasquariello characterized rising interest rates as a "greater risk" to sovereign and corporate debt, noting that the yield on the 30-year US Treasury auction reached 5.618%, the highest since August 2000. Goldman Sachs economists expect that the Federal Reserve, under Kevin Warsh, will hike rates again in December after raising them to 3.75%-4% in September.