Goldman Sachs Research Expects Slower S&P 500 Earnings Growth in 2027 (Only 18%). Can the Bull Market Keep Going?

Goldman Sachs expects S&P 500 earnings growth to slow to 18% in 2027, down from 29% in 2026, but its analyst Tony Pasquariello says the bull market should keep running, with more volatility along the way.

The deceleration is steep: 11 percentage points of growth comes off the table year over year. Even so, Pasquariello's call leans on breadth. Goldman points to earnings growth across all 11 S&P 500 sectors, which suggests the 2027 outlook does not hinge on a single group carrying the index.

The risks are specific. AI spending concerns and recent declines in tech stocks sit at the center of the bearish case. Interpretation: because the market's earnings expectations are still elevated, even a slower 18% pace leaves room for disappointment if AI-related enthusiasm fades further. Tech weakness would hit index-level products like VOO hardest, given their exposure to the benchmark's largest constituents.

Goldman's framing is notable for what it does not say. It does not forecast an earnings contraction. It forecasts slower growth, which Pasquariello reads as compatible with solid returns rather than a top.