Stocks have had a run that has made even seasoned investors a little giddy. Now one of Wall Street’s most closely watched voices is telling everyone to temper expectations before the next 12 months unfold.
Goldman Sachs Chief Global Equity Strategist Peter Oppenheimer has built a reputation for calls that age well. His latest one is not the message bulls want to hear heading into a market already contending with a global bond market that is starting to look shaky.
Why Goldman Sachs sees smaller stock market gains ahead
“We should acknowledge that the S&P 500 and indeed other equity markets around the world have had a phenomenal return over the course of the last year and year to date,” Oppenheimer told Yahoo Finance in an exclusive interview on Opening Bid.
“So we’ve already had a lot of good returns behind us. We would expect lower returns from here,” he added, as Yahoo Finance reported.
Oppenheimer’s track record gives the call added weight. He took a cautious view of markets in early March, well before stocks touched their lows for the year later that month. The call has bolstered his standing among investors who follow his research closely.
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The specific numbers he laid out were more measured than dire. “In most cases, we’re talking about mid- to high-single-digit percentage returns over the next 12 months, lower than we’ve been seeing in every region in the last 12 months,” Oppenheimer said.
“But still, you know, relatively decent so long as economic growth continues. That’s our expectation.”
That framing puts Goldman in a more cautious posture even as the S&P 500 has gained roughly 12% so far in 2026. The most bullish year-end S&P 500 call among major Wall Street firms comes from the Oppenheimer investment firm run by John Stoltzfus, at 8,100, while Bank of America holds the most cautious position at 7,100, as TheStreet reported.
The bond market problem driving Goldman’s caution
Part of what is driving Oppenheimer’s caution is unfolding in a market most stock investors rarely watch closely: government bonds.
The yield on the 10-year U.S. Treasury note, the benchmark that helps set rates on everything from mortgages to car loans to credit cards, touched 4.814%, its highest level since November 2023, according to CNBC.
The 30-year yield has moved even further into uncomfortable territory. It topped 5.33% in August, a fresh 19-year high, while investors grew increasingly concerned about the country’s worsening fiscal picture and persistently elevated inflation.
This is not a uniquely American problem. Bond yields have surged across major economies simultaneously, with Japan’s 10-year government bond yield hitting 3% for the first time since 1996. The U.K.’s 30-year yield reached its highest level since 1998, and Germany’s 10-year yield touched its highest point since 2011, CNN Business reported.
Rate-hike expectations are adding fuel to the fire. Fed funds futures recently showed roughly a 66% chance the central bank raises rates at its next meeting, a shift driven partly by persistently higher oil prices feeding into inflation fears, according to CNBC.
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What rising yields mean for stock valuations
When the 30-year Treasury pays 5.33%, money starts moving. Not dramatically, not all at once, but enough. Especially out of stocks where the return depends on something going right years from now. That is the part of the market getting hit hardest right now.
That tension is showing up in how strategists are framing 2026. Bank of America has taken one of the most conservative postures among major firms with a 7,100 year-end S&P 500 target, while other houses, including Morgan Stanley and Deutsche Bank, remain considerably more bullish, illustrating just how divided Wall Street has become over whether current valuations can be sustained.
Treasury officials are not standing still, either. Treasury Secretary Scott Bessent announced plans to double the size of long-term bond buybacks from $2 billion to at least $4 billion in an effort to improve market liquidity, TheStreet reported.
The move offered brief relief to markets, even as the underlying pressures driving yields remained largely unresolved.
What investors should do from here
This is not just a Wall Street problem. When Treasury yields rise, mortgage rates follow. So do auto loans and credit cards. The same bond market move that is making Goldman’s strategist cautious about stocks is also making it more expensive for someone in Ohio to buy a house or finance a car.
Mid- to high-single digits is not a disaster call. It is Oppenheimer telling investors that the run they just had was unusual and that the next 12 months probably will look different. Four of the past six years were double-digit years. That is not a baseline. That is a streak.
With bond yields still climbing and a Fed decision looming in the weeks ahead, the coming months will offer an early test of whether Goldman’s more moderate outlook proves as prescient as Oppenheimer’s earlier calls, or whether the current bond market stress ends up weighing on stocks more heavily than his relatively measured forecast suggests.
Related: Scott Bessent just made a bold move on the bond market
