Goldman Sachs strategist: S&P 500 could end 2026 higher despite rate chaos, narrow breadth

Tony Pasquariello, head of Goldman Sachs' hedge fund coverage, says the S&P 500 will end 2026 higher. He acknowledges bond-market chaos but calls it a headwind, not a wrecking ball. Four pillars: strong growth, stellar earnings, supportive flows, AI capex. S&P 500 PE has derated to 19x. Q3 EPS growth of 27% is 'terrific,' with Nvidia and Micron driving one-third. Forward PE of median AI play dropped from 32x to 22x. He advises sticking with the fastest horses.