Goldman Sachs on Oil, Fed & AI - FJElite

Since the start of the US-lran War in late February, equities are higher, oil and yields are higher, and the US Dollar is stronger. Our macro measures show this as a large US growth upgrade and a hawkish policy shock on net since the start of the war. Three themes have dominated the market narrative in recent weeks—oil price relief since the signing of the MOU, the AI theme and revival of US growth optimism, and a hawkish shift from the Fed—that have created volatility but less clear direction in many macro assets. There have been reminders that volatility can come from all three fronts in the last week or two —from the spike in oil prices on renewed hostilities, the selloff in semiconductor stocks, and the recent volatility in July Fed pricing first on hawkish Fed commentary and then on more benign inflation.