The next year will be for stock picking - and the next two weeks should see gains, says Goldman Sachs

By Steve Goldstein

Stocks won't be tugging the same way next year, according to an interpretation of options market pricing.

Maybe the S&P 500 will go up or maybe it will go down next year - but the options market is saying don't expect the individual components to move the same way.

That's Goldman Sachs' interpretation of one-year at-the-money forward contracts on the S&P 500 SPX and the Nasdaq 100.

"Investors expected single stock correlations to be lower than any time on record," said John Marshall, head of derivatives research at Goldman Sachs, in a note to clients.

"We believe this was driven by many fundamental themes that were a headwind to some stocks and a tailwind for others (e.g. AI) as well as the growth of consistent index option selling strategies. Looking ahead to 2026, investors are expecting a correlation of 23% for names in the S&P 500," he said.

A separate point made by Goldman analysts led by Gail Hafif is that there's an "overwhelmingly positive seasonal period." They note that while the average December gain is 1.98%, the average return from Dec. 17 to Dec. 31 is 1.77%.

"While we don't necessarily see a dramatic rally, we do think there is room to go up from here into year end," they said.

The S&P 500 finished lower on Wednesday for the fourth straight session, fueled by worries over AI demand. It is just 2.6% away from a record high.

-Steve Goldstein

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12-18-25 0724ET