Goldman Sachs Trader: Middle East Tensions Easing Drive US Stock Investors to AI Non-Core Sectors

June 16: Easing Middle East tensions have given investors a new catalyst to pivot away from AI trading, which has dominated market narratives for most of this year. In a client note, Goldman Sachs Group trader Lee Coppersmith and his team wrote that investors are now identifying undervalued, non-AI-related cyclical stocks. With AI-frenzy fatigue setting in, investors are positioning for a catch-up in these assets. “As the war winds down, the market will look past upcoming inflation data, gradually phase out rate-hike expectations, and refocus on betting on rate cuts,” the group stated. Joe Gilbert, portfolio manager at Integrity Asset Management, added: “This will be a boon for small-cap companies, cyclical stocks, and bonds.”