Goldman Warns: Sharp Rallies Are Classic Bear Market Traps

Recent market gains may be nothing more than a classic bear market rally, with volatility and uncertainty leaving investors exposed no matter which way the market swings, Jan-Patrick Barnert reported for Bloomberg News.

The erratic swings are creating a dilemma for investors: either chase a rally that could fizzle or risk missing a rebound entirely.

Goldman Sachs strategist Peter Oppenheimer said, “Sharp rallies within bear markets are the norm, not the exception.” He warned that the equity market’s recent rebound is fueled more by speculative headlines—especially around tariffs—than real economic clarity.

The erratic swings are creating a dilemma for investors: either chase a rally that could fizzle or risk missing a rebound entirely.

“This equities trade is nasty,” said Charlie McElligott of Nomura Securities.

Many fund managers de-risked in early April amid tariff chaos and are now reluctantly buying back in without adequate exposure to the rally’s upside. The result, analysts say, is a market shaped more by confusion than conviction.