The recent decline in the US stock market was initially seen as a &#34;growth revaluation&#34; targeting excessively high valuations; however, the situation is worsening. Traders believe that the market is sliding into a &#34;growth panic&#34; driven by multiple factors. These factors include: uncertainty in tariff policies, extreme volatility in the cryptocurrency market (represented by Dogecoin), retail investor sell-offs, unclear prospects for artificial intelligence development, and the new US government's tendency to &#34;accept short-term pain for long-term gains.&#34;Goldman Sachs believes that, despite opportunities in the US market, it is necessary to first get through the current turbulent period. The inflation data on Wednesday and the inflation expectations data on Friday are crucial, as they may affect subsequent market &#34;stagflation&#34; trades. So far, Goldman Sachs' stagflation basket (GSPUSTAG) has been the best-performing US theme this year.<h2>Thomas Eason (Head of Index Vol)</h2>The unwinding of the &#34;American exceptionalism&#34; narrative is still ongoing, with systemic factors adding some momentum to the unwinding. Currently, systemic positions have not all been unwound, and the market seems to want to know where the &#34;Trump put option&#34; strike price is. Volatility has reset to tense levels.To reverse this, we set up 1x1.5 and 1x2 call option spreads in QQQ, with expiration dates from March 31 to May 31. This unwinding feels different from the unwinding on August 5 last year, when VIX/Vol arbitrage was typically at zero. As the market hits new lows, volatility remains stagnant. This time, total risk and long/short positions seem to be at zero.<h2>Benny Adler (Head of ECM Trading)</h2><ol><li>As the policy realities of Trump's second term gradually become clearer, the market's post-election &#34;sweet high&#34; has evolved into a rather uncomfortable &#34;hangover&#34; state. These policy realities seem to be more unfavorable to the market than many more sober fundamental expectations had envisioned.</li><li>US growth data has slowed to some extent, and this slowdown appears largely unrelated to tariffs and recent other policy announcements.</li><li>Artificial intelligence—once a significant driving force behind the recent bull market in the US—seems unlikely to save the market in the short term following the uncertainty triggered by DeepSeek.</li><li>Last weekend, Trump essentially conveyed a message to the market that he is willing to endure some short-term pain in terms of the market and the economy. In other words, at least for now, the &#34;Trump put option&#34; is still far from the strike price.</li></ol>All of these factors have collectively led to a shift in market positions from a previously crowded state to a rapid and noticeable one-sided unwinding.The good news is that our adjustment speed is quick, and we have made considerable progress at least in terms of position adjustments. Finding a precise (tactical or otherwise) bottom at the index level or at the industry/micro level is likely an impossible task.Considering all the adverse factors mentioned above, it is not difficult to imagine a scenario where the U.S. major indices still have significant room for decline. Nevertheless, as various participants begin to adopt offensive strategies in what has been a very one-sided risk-averse market, some of the hardest-hit sectors may be quite close to experiencing a tradable rebound.<h2>Richard Privorotsky (EMEA DeltaOne Trading Head)</h2>The market is in a reflexive cycle trying to find the pain points of the Trump administration. A combination of spending cuts + cumulative tariff reductions = growth panic.Stocks are severely oversold, and the major indices such as the S&amp;P 500 Index (SPX) and the Nasdaq Composite Index (NDX), as well as market momentum, are at reliable levels suitable for a short-term rebound.The market lacks catalysts, and the pain index for long and short trading feels like it has reached 10 out of 10, with deleveraging and risk reduction occurring in multiple areas. I feel that we will soon see a bear market rebound, but the market will continue to decline until the pain points are found.<h2>John Flood (Americas Execution Services Head)</h2>Investors are clearly in a state of high tension, and the market is completely unaggressive.The 200-day moving average of the S&amp;P 500 Index at 5730 points has failed to provide support, which is unsettling. The fundamental long-short hedge funds have dropped another 150 basis points this morning (Monday) after a decline of 180 basis points last week (-80 basis points alpha return: concentrated trading, with momentum as the main driver). Hedge funds continue to cautiously reduce individual stock risks (trading is ongoing).Over the past three weeks, asset managers have mostly been in a wait-and-see mode. Today, market activity has increased, with some large-scale tactical reductions occurring in the technology and financial sectors.The S&amp;P's highest liquidity on the books has just fallen below $4 million (the average level in 2021 was $13 million). Asset managers' cash balances are at historical lows, while hedge funds' total risk exposure is at historical highs, indicating that position dynamics remain a real resistance.Although the peak supply of high-speed Commodity Trading Advisors (CTAs) has passed, there are still $17 billion in S&amp;P-related assets for sale at current levels (within the next five trading days). The total trading volume is 24% higher than the 20-day moving average. The trading volume of exchange-traded funds (ETFs) accounts for 32% of the total trading volume, which is a high proportion.What stage are we currently in the market cycle? It turns out this is clearly a difficult question to answer. Over the past few weeks, portfolio earnings have indeed been severely impacted. If you believe that worse situations are brewing, then from a historical perspective, there are still some adverse factors to contend with.Oversold technical conditions are ready for a rebound, but given the strong resistance the market faces, including Washington-related disruptions (tariff and debt ceiling issues), slowing growth, and relatively high valuations, the rebound is likely to be used as an opportunity for selling.**<h2>Jon Shugar (Head of Cross-Asset Sales)</h2>In a challenging technological backdrop (with the number of questions regarding total risk exposure levels at a five-year high), investors are increasingly leaning towards a growth panic perspective, particularly focusing on the impact of policy uncertainty on consumer spending and business confidence.In this context, when market risk appetite declines, credit protection for high-yield bonds, receiver swap options for 1 to 5 years in the event of a more aggressive shift in Federal Reserve policy, as well as hedging strategies for the Euro Stoxx 50 Index (SX5E), Euro Stoxx 600 Index (SX7E), and the German DAX Index are worth considering (funds flowing into Europe have consistently followed the direction of policy announcements but may face risks due to an escalation of trade conflicts or policy effects falling short of expectations).From a long position perspective, the non-pharmaceutical healthcare sector remains quite attractive from both a holdings and valuation standpoint, and it is easy to invest with limited loss potential.<h2>Brian Garrett (Head of Cross-Asset Equity Execution)</h2>Will volatility bring about a rally?Looking back at the past 12 years of data (excluding March 2020), the market has returned to normal after experiencing these prolonged periods of volatility:<ol><li>The inversion of the Chicago Board Options Exchange Volatility Index (VIX) spot and 1-month futures is a signal of market stress or panic; 2. The VIX spot has been inverted with the 1-month futures for 11 consecutive trading days; 3. This sustained inversion has only occurred 20 times in 12 years (again, excluding 2020).</li></ol>When this happens, the 10-day average return is +4%, with an 85% hit rate; the 22-day average return is 4.1%, with a 95% hit rate.<h2>Erin Tolar (Private Banking, Securities Lending)</h2>Performance has indeed been affected. As of today, we expect the performance of global flexible loan strategies (FLS) funds to have turned negative this year (having once risen as much as 4% in mid-February), while technology, media, and telecommunications (TMT) long-short funds have fallen nearly 2% year-to-date, having peaked at an 8% increase in mid-February.Despite the market sell-off since mid-February, it wasn't until Friday that we saw hedge funds taking substantial actions to reduce risk.In the past three weeks, hedge funds have adjusted their risk exposure by significantly shorting macro products and to a lesser extent shorting individual stocks — the net leverage of FLS funds has decreased at the fastest rate since 2022 and is now close to a one-year low.Friday marked our first observation of hedge funds conducting large-scale deleveraging within our business scope (with U.S. stocks experiencing the largest dollar-denominated deleveraging in over two years), indicating that the risk-off event is not yet over.<h2>Erin Briggs (Managing Director of Derivatives Sales)</h2>Recent client activity and communications have primarily focused on increasing macro hedges and adjusting portfolios to reflect heightened concerns about U.S. growth. Prior to the recent market volatility, the skew of equity volatility was already quite highWe have now fallen into a market gamma range where it turns negative, with implied volatility and daily straddle option costs at relatively high levels.Although the intraday actual volatility is high, our trading desk believes that there is not much opportunity to directly go long on volatility now.The trading desk currently believes that engaging in net selling of volatility in those heavily shorted market sectors (such as the Russell 2000 Index ETF (IWM), most heavily shorted portfolios, momentum stocks shorted through call option spread strategies, call option ratio strategies, etc.) to capture a rebound due to deleveraging purposes or relief is valuable.<h2>Lee Coppersmith (Managing Director of Derivatives Sales)</h2>Trump's interview yesterday did not instill any confidence in stock investors, and it is likely to push &#34;Trump put options&#34; further away from the strike price.The positioning indicators in the U.S. stock market have shown some signs of risk reduction, but so far there has been no widespread capitulation.Our market sentiment indicators are at neutral levels, without signaling any &#34;all clear,&#34; and while our measure of the stock market's growth expectations is now closer to the new expectations from Goldman Sachs Research, it has not excessively broken below expectations.The market is risky, and investment should be cautious. This article does not constitute personal investment advice and does not take into account the specific investment objectives, financial situation, or needs of individual users. Users should consider whether any opinions, views, or conclusions in this article are suitable for their specific circumstances. Investment based on this is at one's own risk

Goldman Sachs traders analyze the recent decline in U.S. stocks, believing that the market is facing a "growth panic" triggered by multiple factors, including uncertainty in tariff policies, cryptocurrency volatility, retail investor sell-offs, and unclear prospects for artificial intelligence. Although there are opportunities, the turbulent period must be navigated first. Key inflation data will influence market trends. Market sentiment has shifted from "sweet euphoria" to a "hangover" state, with slowing growth data unrelated to policy announcements, and artificial intelligence is unlikely to save the market in the short term

- The recent decline in U.S. stocks is evolving from a "growth revaluation" to a "growth panic" driven by factors such as tariff uncertainties and cryptocurrency volatility.  
- Goldman Sachs notes that while opportunities exist, the market must first navigate the current turmoil, with key inflation data expected to influence future trading.  
- Despite the challenges, some sectors may be nearing a rebound as participants adopt more aggressive strategies in a previously one-sided risk-averse market.

Goldman Sachs traders interpret the U.S. stock market "Black Monday": a short-term rebound may be a selling opportunity!