Bullish investors may need to temper their expectations for the year ahead, as strategists at Goldman Sachs project a slowdown in equity market gains over the next 12 months. Peter Oppenheimer, Chief Global Equity Strategist at Goldman, noted in an interview that while the S&P 500 and other global markets have delivered exceptional returns over the past year and year-to-date, much of that good fortune has already been captured, suggesting future returns are likely to be more modest.
Oppenheimer, who has built a loyal following on Wall Street through several farsighted market calls—including a cautious stance in early March just before equities hit their yearly low—added that in most cases, the expectation is for mid-to-high single-digit percentage returns over the coming year. This would represent a noticeable drop from the gains seen across most regions in the prior 12 months, though he emphasized that such an outcome would still be relatively solid as long as economic growth persists.
To be sure, with the S&P 500 up 12% so far in 2026, several factors are aligning that could flatten market momentum as the year draws to a close. On one front, the ongoing selloff in global government bonds is intensifying, and its vigor should serve as a cautionary signal for investors of all sizes. The US 10-year Treasury yield—the world's most important single interest rate and a benchmark for pricing everything from mortgages and auto loans to credit cards—has recently climbed to levels not seen since 2023. Meanwhile, the US 30-year Treasury yield is hovering near two-decade highs, which offers little comfort to those planning for long-term financial security.
What makes the current moment particularly troubling is the global nature of this bond yield surge. Japan's 10-year government bond yield has risen above 3% for the first time since 1996, UK 10-year yields have hit their highest point since mid-2007, and German 10-year yields are at levels not witnessed since the peak of the European debt crisis in 2011. As Matt Maley, strategist at Miller Tabak, pointed out, equities have managed to shrug off these moves so far this year, but history suggests that higher yields can be ignored only for so long before they begin to matter.
When bond markets in the US, Japan, the UK, and Germany are simultaneously experiencing selloffs, it is not coincidence—it is a signal. This indicates that global investors are losing confidence in governments' ability to manage debt, control inflation, and maintain fiscal discipline. Additionally, crude oil prices have once again surged past $90 per barrel, driven by escalating geopolitical tensions involving Iran and the potential implications for the Strait of Hormuz. The sharp rise in energy costs is feeding directly into the broader economy, pushing up prices for transportation, agriculture, and manufacturing inputs, with commodities like corn and sugar seeing dramatic spikes in recent weeks.
Tom Essaye, founder of Sevens Report Research, summarized the situation succinctly: high oil prices are pushing yields higher, and elevated yields are putting pressure on equities. Until this dynamic resolves—which has happened before, at least temporarily—markets are likely to remain weak, with growth and cyclical sectors leading the decline.