The party’s over, folks. After a decade-long bull run that saw the S&P 500 deliver 13% annual returns, Goldman Sachs analysts are raining on the parade. The investment bank’s crystal ball projects a mere 3% annual return for the S&P 500 over the next 10 years — well below the long-term average of 11%. This shift indicates that investors are rethinking their risk strategies as stock returns are expected to drop, making bonds a more attractive option.

• According to Goldman, there’s a 72% probability that the S&P 500 will underperform compared to Treasury bonds, with a 33% chance of falling behind inflation by 2034.
• Despite the S&P 500 beating global markets in eight of the last ten years, Goldman believes that even in the best-case scenario, where some sectors excel, returns may only reach 7% annually over the next decade.

No landing, no problem? While Goldman projects a downturn, UBS offers a brighter outlook, predicting a “no landing” scenario where the US economy avoids significant slowdowns and maintains steady growth. UBS cites strong job market resilience and solid GDP figures as signs the economy might dodge both recession and overheating. Additionally, despite industrial strikes and natural disasters, retail sales and nonfarm payrolls continued to beat forecasts. Echoing this sentiment, Apollo’s Torsten Sløk noted, “In short, the no landing continues.”