Goldman Sachs warns of tech stock pressures, advises caution

Goldman Sachs warns that tech stocks are facing multiple pressures from macroeconomic factors. Recent declines are attributed to government spending uncertainties, weak consumer confidence, and rising tariffs affecting cyclical stocks. Investors are becoming more cautious, concerned about the potential impact of an economic slowdown on corporate performance. According to Goldman Sachs, the tech sector has seen its worst start to the year since 2020. The Nasdaq index dropped by about 8% in March, marking its worst month since December 2022. The overall positioning in tech stocks is near multi-year lows, indicating a shift in investor sentiment. Peter Callahan, a trader at Goldman Sachs, notes that investors are reassessing their risk tolerance. They are focusing on economic growth slowdowns and the risks of quarterly fluctuations. While demand for cybersecurity software is stable, overall trends in IT spending are declining, raising concerns about future corporate profits. The upcoming earnings season has created a cautious market atmosphere. Goldman advises investors to maintain low exposure in the technology, media, and telecommunications sectors. They recommend focusing on defensive stocks while remaining flexible to adapt to ongoing market changes.