Goldman flags 'extreme market move potential'

Goldman Sachs is warning about the potential for significant market volatility due to shifts in commodity markets and tech capital expenditures. These conditions could lead to large price swings and increased demand for risk management expertise. Geopolitical tensions and supply chain disruptions are contributing to this "high volatility era". The shift in commodity markets stems from policies aimed at enhancing supply security, including tariffs and stockpiling, which can make prices more sensitive to shocks. Central banks and private sector investors are increasingly using commodities like gold and copper as hedges against geopolitical and financial risks, further impacting prices. This "insurance-type" demand is driving a transition towards regionally segmented systems, increasing volatility. Goldman Sachs also projects a surge in capital expenditure by U.S. tech giants (hyperscalers) to almost $1.4 trillion between 2025 and 2027. This increase is driven by robust demand for AI infrastructure and cloud computing capacity. While analysts predict a slowdown in capex growth by the end of 2026, Goldman Sachs notes that these estimates have consistently been too low in recent years.