Goldman Sachs said in its Aug. 31 month-end market intelligence report that August looked quiet on the surface, but a more important shift was taking place underneath: earnings were catching up with valuations. The bank said the S&P 500 gained about 2.5% in August, and all of that advance came in the first two trading days of the month. For the following three weeks, the market moved sideways. The 10-year U.S. Treasury yield finished the month only 5 basis points above its level at the start of August, and oil prices were nearly unchanged. Gold rose 9%, silver climbed 22%, and Bitcoin gained 25%.
Goldman said second-quarter earnings season was stronger and broader than the market had expected. Median S&P 500 companies posted 14% earnings-per-share growth, while the index still trades at 20x forward earnings. The S&P 500 is up 12% year to date, but valuations have not expanded, which Goldman said shows that earnings growth has absorbed the rise in stock prices. More importantly, even after excluding AI infrastructure companies, the rest of the market delivered the fastest earnings growth of this cycle, pointing to a broader profit recovery.
Warsh’s Jackson Hole remarks raised rate-hike odds
Goldman described August as a month in which "nothing happened, but a little bit of everything happened." The Federal Reserve held rates steady in July, but Warsh’s hawkish debut at Jackson Hole pushed the probability of a September rate hike above 50%. Warsh called the inflation data "concerning" and said policymakers "must be confident that underlying inflation is moving toward target clearly and quickly enough, or else we have more work to do." He also said the 2% PCE inflation target is a "firm, fixed target" and played down the recent slowdown in wage growth, arguing that wages have not been a reliable long-run gauge of underlying inflation trends.
Goldman economists expect both August core CPI and core PCE to rise about 0.2% month on month, so they do not expect a rate hike. Even so, the bank said uncertainty around the policy path has risen sharply. In Goldman’s view, Warsh’s tone means rate increases could return to the agenda if disinflation stalls. The report added that lower Federal Reserve transparency could lead to greater market volatility and that investors have become much more sensitive to incoming data.
Treasury buybacks and energy risks remain in focus
The U.S. Treasury announced in August that it would increase the scale of its monthly bond buybacks in an effort to push down long-end yields. Goldman strategist Will Marshall said the move could improve market technicals at the margin, but is unlikely to cause a large drop in yields.
On energy, the Strait of Hormuz has been closed for six months. Goldman’s commodities team said producers and shippers have gradually adapted, allowing more crude to leave the Middle East despite the disruption to one of the world’s most important energy trade routes. Goldman said oil prices may already have peaked, but the upside risk to European natural gas remains significant. Analyst Sam Dart kept his forecast for the European gas benchmark at $50 per megawatt-hour this winter, while warning that upside risks would become much larger if shipping through Hormuz to Asia does not recover.
Earnings are driving stocks, and AI spillover is broadening
Goldman said the central market shift is coming from earnings. With the S&P 500 up 12% this year and still trading at 20x forward earnings, the bank argued that profit growth rather than multiple expansion is supporting prices. During the second-quarter reporting season, median S&P 500 companies posted 14% EPS growth, well above the historical average.
Analyst Ben Snider said AI infrastructure stocks accounted for a meaningful share of earnings growth, but profit momentum is also picking up elsewhere. Excluding AI infrastructure, the rest of the market still posted the fastest earnings growth of the current cycle, which Goldman said shows that the recovery is spreading beyond a narrow group of AI names.
Nvidia reported strong results in August and mapped out a path to 70% year-on-year growth by 2027, with supply-chain capacity described as the main remaining constraint. Goldman analyst Jim Schneider said Nvidia’s edge lies in order visibility and transparency around gross margins. Goldman utilities analyst Carly Davenport said rising electricity demand and higher construction costs are driving more capital spending across the power sector, while solar and wind remain attractive.
Goldman also said AI adoption is moving forward at the application layer. Internet analyst Eric Sheridan said the market favors companies that can show AI monetization quickly rather than names that require a long payback period. E-commerce platforms are benefiting from better model accuracy and improved personalization, and adoption of agentic AI solutions is accelerating. Goldman pointed to Salesforce’s partnerships with AI model developers as evidence that traditional software companies can do more than survive in the AI era. Analyst Gabriela Borges said the case shows how incumbent software companies can secure a place in the AI ecosystem through partnerships and product upgrades.
Growth and inflation signals are mixed
August data painted a mixed picture. Goldman raised its third-quarter GDP tracking estimate to 2.7%. July personal consumption expenditures and core capital goods shipments both came in above expectations. The Philadelphia Fed manufacturing index climbed to its highest level since 2021. Even so, Goldman economists said business confidence is being driven more by forward-looking expectations than by current conditions, leaving a gap between sentiment and present economic activity.
On inflation, July core PCE came in slightly above expectations, while headline PCE rose 3.7% year on year. With inflation running high for five straight years, the market has started to debate whether inflation expectations could become unanchored. Goldman economist Abhay Duggirala examined that question in the report and concluded that expectations are at most modestly elevated and are not at immediate risk of becoming unanchored. Goldman said inflation should gradually move lower after the Strait of Hormuz reopens and tariff pressure fades, but neither of those developments showed progress in August.
September data and conferences may offer more direction
Goldman summed up August with a simple market narrative: earnings are catching up with valuations, but the macro direction remains unclear. The ISM manufacturing survey is due on Sept. 1, followed by nonfarm payrolls, CPI, and PCE data. Goldman is also scheduled to host its annual Communacopia technology conference on Sept. 8 and its global consumer and retail conference on Sept. 14, events the bank said could offer more micro-level guidance.
The original Chinese article said it was a整理与解读 of a third-party broker research report from Goldman Sachs dated Aug. 31, 2026, combined with public market information. It also said that any ratings, price targets, earnings forecasts, and related judgments cited in the piece reflect the views of Goldman analysts and their institution only, not the views of 潮向研究, and do not constitute investment advice.
The article ended with a standard reminder that markets involve risk, decisions should be made independently, and the piece should not be used as a basis for buying or selling any security.