Goldman Sachs CEO David Solomon remains broadly confident in the markets and the U.S. economy—but he’s not blind to the potential bumps ahead. Speaking at Italian Tech Week on Friday, Solomon shared a cautiously optimistic outlook, noting that while he’s not losing sleep over current conditions, advisors and investors should prepare for a market environment that could test discipline and selectivity in the coming years.
“I sleep very well and I'm not going to bed every night worried about what will happen next,” Solomon told Bloomberg in Turin. Still, he said, the long bull run has created frothy conditions in certain corners of the market, particularly around high-growth technology themes, and history suggests that a correction is inevitable.
For wealth advisors, Solomon’s comments serve as a reminder to balance optimism about innovation-driven growth with sober attention to valuation risk, macro policy shifts, and the uneven nature of market cycles. Below are four key takeaways from Solomon’s outlook—and how they could shape advisory strategy heading into 2026.
1. A Market Pullback Is Likely—But Not a Crisis
Solomon cautioned that the equity markets could experience a drawdown within the next one to two years. He drew a comparison to past periods when excitement around transformative technologies caused valuations to run well ahead of fundamentals.
“Historically, when there’s a new technology that generates enormous enthusiasm, markets tend to run ahead of their potential,” Solomon said. “You’re going to see a similar phenomenon here. I wouldn’t be surprised if, in the next 12 to 24 months, we see a drawdown. But that shouldn’t be surprising given the run we’ve had.”
The S&P 500 has climbed roughly 15% year-to-date, recapturing earlier losses triggered by tariff-related volatility. Goldman Sachs’ own research estimates a more than 20% probability of a meaningful drawdown in the next 12 months.
For advisors, this doesn’t signal the end of the bull market but rather a transition period that calls for prudent portfolio rebalancing. Advisors may want to consider reinforcing diversification, trimming overextended tech exposures, and managing client expectations about short-term volatility. As in prior cycles, valuations tend to recalibrate before a new phase of sustainable growth begins.
2. The Bull Market Will Create Sharp Divergences
Solomon underscored that the current cycle—like every major innovation boom before it—will separate enduring winners from fleeting momentum plays. Drawing parallels to the late-1990s internet surge, he noted that while a few giants like Amazon emerged as long-term leaders, many others faded once the euphoria cooled.
“At the end of the move, there’ll be a bunch of winners and a bunch of losers,” Solomon said. “There’ll be capital that delivered very attractive returns, and a lot that didn’t.”
That dynamic is already visible today across AI, semiconductor, and clean energy sectors, where valuations have soared amid a rush of investor enthusiasm. For RIAs and wealth managers, Solomon’s observation reinforces the need for disciplined research, active due diligence, and a strong focus on quality.
In an environment driven by innovation narratives, advisors should assess whether companies possess defensible moats, scalable models, and sustainable profitability. The ability to distinguish genuine technological leverage from speculative momentum will likely define performance over the next several years.
Solomon’s comments suggest that the next leg of the bull market will be more selective. Advisors who lean on fundamentals rather than hype—and who maintain a longer time horizon—may be best positioned to navigate the divergence between true innovators and overvalued pretenders.
3. The U.S. Economy Will Stay Resilient
Despite short-term headwinds, Solomon said he expects the U.S. economy to maintain steady growth, with an acceleration possible by 2026. He pointed to multiple structural supports: robust fiscal spending, infrastructure investment, and major capital expenditures across sectors.
“The U.S. economy is in pretty good shape,” he said, noting that GDP growth of 3.8% in the second quarter reflects solid momentum. He forecasted that growth would likely moderate to just under 2% going forward—a bit below historical averages but still consistent with healthy expansion.
For advisors, the message is clear: while the rate of growth may slow, recession risk remains limited. Fiscal policy remains highly supportive, and private-sector capital spending continues to underpin productivity. However, Solomon cautioned that two key metrics warrant close monitoring—labor and inflation.
“You have to watch labor,” he said, referencing early signs of weakness in the job market. “And you have to watch inflation—whether the impact of trade is a one-time price movement or something more significant.”
For wealth managers, that means maintaining flexibility in portfolio positioning. A slowing but stable economy may favor quality equities, shorter-duration fixed income, and real assets that can offset inflation risk. Advisors should also continue educating clients on the structural shifts driving the post-pandemic economy—from reindustrialization and reshoring to the integration of AI into core business operations.
4. Dealmaking Is Set to Accelerate
The final piece of Solomon’s forecast focuses on the M&A landscape, which he expects to strengthen considerably in 2026. Corporate leaders, he said, are increasingly focused on strategic consolidation, efficiency gains, and positioning for global competitiveness—all of which create a fertile environment for dealmaking.
Goldman data supports that outlook: M&A dollar volume is up 29% year-over-year, with the number of transactions increasing 8%. Analysts at the firm expect deal volume to climb another 15% next year, aided by a more accommodating regulatory stance and renewed boardroom confidence.
For RIAs serving business owners and executives, the implications are significant. Elevated deal activity often translates into liquidity events, portfolio reallocation opportunities, and new demand for sophisticated tax and estate planning. Advisors who proactively engage clients about potential M&A liquidity can help them navigate capital gains exposure, reinvestment strategies, and philanthropic objectives well ahead of any transaction.
From a market perspective, an uptick in dealmaking also tends to support equity valuations, particularly in mid-cap and sector-specific growth names. Advisors might consider exposure to merger arbitrage or event-driven strategies that capture alpha from this renewed activity.
Navigating Opportunity with Caution
Taken together, Solomon’s comments outline an economic and market outlook that’s both constructive and complex. The underlying message: stay optimistic, but stay disciplined. Innovation-driven growth continues to fuel new opportunities, yet cycles of overexuberance and correction are part of the natural rhythm of markets.
For advisors, this is an ideal moment to reassess client portfolios for both risk tolerance and opportunity capture. The likely scenario over the next 24 months is one of gradual normalization—where volatility rises modestly, valuations reset in some areas, and leadership within the market evolves.
Key takeaways for RIAs and wealth managers include:
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Prepare for volatility without abandoning growth: Maintain exposure to innovation and productivity themes, but rebalance toward companies with durable earnings and cash flow visibility.
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Reinforce diversification: A more selective market favors balanced allocations across sectors, geographies, and asset classes.
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Watch inflation and labor: The dual pressures of wage growth and trade-driven price changes could influence both Fed policy and portfolio duration decisions.
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Position for deal-driven opportunities: Rising M&A activity can create new liquidity and wealth-transfer scenarios—ideal touchpoints for deepening client relationships.
A Pragmatic Optimism
Solomon’s tone reflects what many institutional and advisory professionals already sense: this is not a market on the brink of collapse, but rather one evolving into a new phase of maturity. AI, automation, and reshoring are reshaping economic productivity. Fiscal and capital investment remain robust. But stretched valuations and shifting global trade dynamics demand a measured approach.
For wealth advisors, that balance—optimism anchored in prudence—is the defining theme heading into 2026. As Solomon put it, the goal isn’t to lose sleep over market swings, but to remain clear-eyed about what drives long-term success: quality, patience, and disciplined capital allocation.
“I’m not going to bed every night worried about what happens next,” Solomon said. For advisors guiding clients through the next chapter of the cycle, that perspective may be the most valuable takeaway of all.
