Goldman's John Flood Sees Buying Opportunity in Stock Market Selloff

Friday's pullback in US equities offers a chance to add exposure rather than a reason to retreat, with a clear path for the S&P 500 to reach 8,000 this year, according to John Flood, the head of Americas equities execution services at Goldman Sachs Group Inc. 

The decline on Friday, Flood said, was likely led by profit-taking ahead of the weekend, and anticipation of additional equity supply coming to the market through initial public offerings — the type of selloff that has historically rewarded buyers.

“There haven't been many dips to buy this year,” Flood said in an interview on Bloomberg Television. “Historically, buying a 2% pullback in the S&P 500 has paid off, and I think that continues to be the case.”

The S&P 500 fell 2.6% on Friday, while the Nasdaq 100 sank about 5%, the most since April 2025.

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The losses came after a stronger-than-expected jobs report pushed Treasury yields higher and revived speculation that the Federal Reserve could keep policy restrictive for longer. 

Flood cited inflation, geopolitical tensions involving Iran and concerns around private credit as the issues investors most frequently raise, characterizing them as a healthy “wall of worry” rather than evidence of deteriorating confidence.

The broader market backdrop remains supportive, he argued. Goldman's proprietary sentiment indicator, which aggregates positioning across hedge funds, mutual funds, retail investors and foreign investors, remains near neutral despite the S&P 500 having already logged 24 record highs this year.

“Despite the stock market being close to all-time highs at the index level, there is still concern out there,” Flood said.

From an institutional-investor perspective, Flood said positioning remains disciplined rather than euphoric. Goldman's prime brokerage data show hedge-fund gross exposure — the combination of long and short positions — at near record highs. 

Investors remain long many AI and technology stocks while simultaneously carrying large short positions in macro instruments such as equity indexes and exchange-traded funds.

“What that tells me is there's still healthy skepticism about what is going to happen next,” Flood said, while adding that if hedge funds were to cover those hedges, it could fuel the next leg up in stocks. 

Mutual-fund cash balances also remain close to long-term averages, suggesting investors still have capital available to deploy into equities.

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Institutional demand for new equity offerings, meanwhile, is among the strongest Flood said he has seen in his career, referring to reports that Meta Platforms Inc. is considering a massive share sale following a blockbuster deal involving Google earlier this week. Large-scale equity issuance by mega-cap technology companies, he said, reflects healthy market demand rather than speculative excess.

“There's never been more robust demand for these offerings,” Flood said.

On the retail side, Flood expects buying activity to remain resilient as long as the labor market stays intact. Goldman's data show individual investors have not been net sellers of US equities for more than a week since March 2020, during the depths of the pandemic.

“Until we start to see job destruction, that retail bid will likely remain a healthy constant in the marketplace,” he said.

The factor most likely to challenge his constructive outlook would be a broad-based earnings disappointment across corporate America. For now, though, Flood sees little evidence of that happening.

“If you start to see earnings holistically across the S&P 500 disappoint, that would be highly concerning,” he said. “We haven't seen any evidence of that.”

With a wave of high-profile IPOs expected before year-end — including listings from SpaceX and Anthropic PBC — Flood said the issuance pipeline appears to be justified by the fundamentals rather than indicative of a market peak. He also expects demand from corporate buybacks to balance the new supply from IPOs.

As for near-term tactical risks, Flood noted that systematic investors such as commodity trading advisers and volatility-control funds are already carrying relatively full S&P 500 exposure after a strong year. Those investors would likely become sellers if equities weaken over several consecutive sessions, he said.

For now, Flood remains firmly bullish. “We think these dips are buying opportunities,” he said. “There's a clear path to 8,000 and beyond this year.”

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