Goldman Sachs and Morgan Stanley CEOs Warn of Stock Market Correction
The S&P 500, Dow Jones Industrial Average, and Nasdaq all reached record highs in 2025, alongside Japan’s Nikkei 225, South Korea’s Kospi, and major European indices like the FTSE 100. However, top Wall Street executives believe a market correction is imminent.
Predicted Market Drawdown
David Solomon, CEO of Goldman Sachs, forecasted a significant market decline within the next one to two years during the Global Financial Leaders’ Investment Summit in Hong Kong.
“It’s likely there’ll be a 10 to 20% drawdown in equity markets sometime in the next 12 to 24 months. Things run, and then they pull back so people can reassess.”
He emphasized that such pullbacks are common and normal in sustained bull markets:
“A 10 to 15% drawdown happens often, even through positive market cycles. It’s not something that changes your fundamental, your structural belief as to how you want to allocate capital.”
Investor Perspective on Market Corrections
At the same event, Morgan Stanley CEO Ted Pick encouraged investors to accept the possibility of market dips as a healthy part of investment cycles.
“Investors should even welcome the possibility of drawdowns, and they are healthy when they are not driven by some sort of macro cliff effect.”
Factors Behind Recent Market Highs
- Strong investor interest in artificial intelligence-related stocks
- Optimism around potential interest rate cuts in the U.S.
Despite the recent surge, leading financial figures urge caution, reminding that market corrections serve as necessary adjustments rather than signals of structural change.
Author's summary: Top Wall Street CEOs expect a 10-20% stock market drop within two years, viewing it as a normal correction amid ongoing positive economic cycles.