Goldman Sachs Group Inc. President John Waldron said markets are primed for possible further declines and investors will be keeping close tabs on the upcoming key earnings report from technology leader Nvidia Corp.
“It strikes me the market could pull back further from here,” Waldron said in an interview on the sidelines of the Bloomberg New Economy Forum in Singapore on Wednesday. “I do think the technicals are kind of more biased for more protection, and more downside.” The S&P 500 is down more than 3% this month, on course for its worst month since March, while volatility has surged. A selloff in the world’s largest technology companies has reignited a debate on AI, and whether it is generating enough revenue or profit to justify the massive spending on infrastructure. “You’re seeing in the markets right now a pullback, which I think is healthy — markets have run quite a bit this year,” he said on Bloomberg Television. “Markets are heavily focused on this AI dynamic: are we going to get the returns on capital invested that the market expects, and is that priced in? That’s a big debate.” Nvidia’s earnings later Wednesday “will be a very important moment for the markets,” he added. Wall Street’s so-called fear gauge, the Cboe Volatility Index, topped 24 — above the key 20 level that causes concern for traders — and reached its highest in a month “What I feel comfortable in is taking a two, three, five-year view of the impact of AI,” Diamond said in an interview on Bloomberg TV. “The likelihood is that we are going to have a significant correction,” he told the event earlier Wednesday.