Goldman Sachs says equity investors appear confident the Federal Reserve can keep cutting interest rates without derailing growth, betting the U.S. economy may even reaccelerate into 2026 thanks to government fiscal support.

By contrast, the bank noted, fixed-income markets are more focused on the risk of a sharp deterioration in employment data. That divergence makes upcoming releases—particularly the jobs report due Friday (Trump permitting) potentially market-moving.

“Going forward, economic data will be critical, with markets likely to react sharply to each print as they assess whether equities or bonds have the correct read on the economy,” Goldman said.