Goldman Sachs bet on consumer stocks to carry equity rally in 2026

• Goldman's preferred sectors include healthcare, materials, and consumer goods, with strongest conviction in 'nice-to-have' products like upscale apparel, tour operators, and casinos rather than essentials
• The S&P Retail Select Industry Index has risen 3.5% year-to-date and 8.8% since early November, with featured stocks including Dick's Sporting Goods, Burlington Stores, Best Buy, and Gap
• The rotation comes as AI trade enthusiasm cools and economists forecast 2.1% US GDP growth in 2026, with easing tariff pressures, stabilising labor markets, and tax rebates expected to support consumer spending

Goldman Sachs Bets on Consumer Stocks to Lead 2026 Equity Rally

Key Investment Shift

Goldman Sachs strategists are pivoting away from AI-focused stocks toward middle-income consumer spending plays as fresh drivers for the US equity rally in 2026. Led by strategist Ben Snider, the firm believes stocks tied to household spending are better positioned to benefit from broadening economic expansion as AI enthusiasm cools.

Investment Thesis and Sectors

In a January 6 note, Goldman identified middle-income consumer stocks as "particularly attractive," expecting accelerated real income growth to boost sales for companies with steady demand and thin margins. Preferred sectors include:

• Healthcare providers
• Materials producers
• Consumer goods manufacturers
• Discretionary retail (upscale apparel, accessories, household goods)
• Tour operators and casinos

Goldman emphasizes "nice-to-have" products over necessities, reflecting confidence in value stocks outperforming through early 2026.

Supporting Economic Factors

The firm cites easing tariff pressures under President Trump, stabilizing labor markets, and tax rebates from recent legislation as catalysts for consumer spending growth. Bloomberg economists project 2.1% US GDP growth in 2026, driven primarily by consumer spending.

Market Performance

The S&P Retail Select Industry Index has gained 3.5% year-to-date and 8.8% since early November, including stocks like CarMax, Etsy, and Academy Sports & Outdoors. Dick's Sporting Goods emerged as an early winner, with options activity suggesting potential moves toward $250 per share, offering up to $3.5 million in gains for some traders.

Named Opportunities

Goldman highlights Dick's Sporting Goods, Burlington Stores, Best Buy, Five Below, Levi Strauss, and Gap as strong plays on rising middle-class wealth, as investors rotate from stretched tech valuations into traditional value sectors.