Goldman Sachs' latest report indicates that despite the S&P 500 index being less than 1% away from its all-time high, market internal divergence has reached its worst level since the dot-com bubble burst. Institutional investors are rushing into "safe assets" at a pace not seen since the COVID-19 pandemic shock.

According to a report by Goldman Sachs flow strategist Lee Coppersmith, the Goldman Sachs Quality Factor has surged over 16% in the past eight weeks, a magnitude of movement not seen since the 2020 pandemic shock. Meanwhile, the technology sector, which had topped the net buy list for several consecutive weeks, abruptly became the sector with the largest net selling last week, with its long-short ratio falling to the 17th percentile over five years.

Goldman Sachs analysts believe that although risk aversion within the market has significantly increased, an extremely concentrated market structure has historically not been a bearish signal, and the S&P 500 index is still expected to rise further over the next 1 to 3 months. The primary downside risks currently are oil prices and interest rate movements.