Goldman Sachs says U.S. equities may show some signs of exuberance but stop short of bubble territory, with market gains still supported by solid fundamentals.

The bank noted that while tech valuations remain elevated, the sector’s leading firms are financially robust, and much of the AI-driven growth is concentrated among a handful of dominant players.

Goldman concluded that current valuations are not yet at historic bubble levels, though it advised investors to maintain diversified portfolios given pockets of over-optimism in certain segments.

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Impacts to eye include:

• Equities: Suggests room for further gains but highlights need for selectivity within tech.

• FX: Reinforces risk-on sentiment while curbing fears of imminent correction.

• Rates: Supports moderate growth outlook, reducing urgency for defensive positioning.