In its latest outlook, Goldman Sachs points out that as the Artificial Intelligence fever potentially cools, “Middle-Class Consumption” is poised to become the primary engine driving the 2026 U.S. stock bull market.
Goldman Sachs strategist Ben Snider and his team noted that with expected economic growth in the U.S., the market focus should shift toward companies benefiting from the expansion of middle-class spending—particularly those in the “lifestyle improvement” and “experience-based” goods and services sectors.
The team favors businesses offering “Want-to-Have” rather than “Need-to-Have” products, such as upscale apparel retailers, home goods manufacturers, tour operators, and casinos. They believe that the fading negative impact of Trump’s tariff policies, a stabilizing labor market, and tax refunds from prior legislation will collectively boost consumer confidence and spending power.
Market data has already begun to validate this trend: the S&P Retail Select Industry Index has risen 3.5% year-to-date and has climbed 8.8% since the start of last November’s holiday shopping season. The index, which includes companies like CarMax, Etsy, and Academy Sports & Outdoors, reflects investors rotating out of the tech sector—which has led gains in recent years—and into consumer stocks that previously lagged.
Rotation from Growth to Value
As valuations for AI-themed trades reach historical highs, Wall Street is initiating a structural rotation from growth stocks to value stocks. A Bloomberg survey shows that economists expect the U.S. economy to grow by 2.1% in 2026, driven by consumer spending. This macro backdrop is guiding capital away from overheated tech valuations toward value stocks directly linked to real economic recovery and middle-class purchasing power.
In a report to investors on January 6, Goldman Sachs stated:
“Stocks linked to middle-income consumer spending are particularly attractive. Value stocks will continue to outperform the broader market in early 2026. Real income growth for middle-income consumers is set to accelerate, which should translate into improved sales growth.”
Charlie McElligott, cross-asset macro strategist at Nomura Securities International, noted that the core of this shift lies in the market’s re-pricing of economic growth expectations. He stated:
“The market is raising growth forecasts, which, if realized, will benefit traditional value sectors. Last year’s market gains were dominated by a handful of stocks (about 12), whereas the current rally’s breadth is significantly widening as capital rotates into more volatile sectors closely tied to the fate of the American ‘Main Street’ consumer.”
Retailers Emerge as Early Winners
Dick’s Sporting Goods (DKS) has emerged as an early beneficiary of this rotation toward the “middle-class consumption” theme. The sporting goods retailer saw its shares rise 6.1% in the first four trading days of 2026, reversing a 13% decline from the previous year. This strong start confirms the recovery expectations held by institutions like Goldman Sachs.
On Tuesday local time, an options trader bet that the stock would return to its early 2025 all-time high of $250 per share. A premium of $84,000 was placed on a trade that could potentially yield up to $3.5 million, signaling significant optimism about the company’s outlook.
Goldman Sachs has explicitly included Dick’s Sporting Goods in its recommended “Middle-Class Consumption” portfolio, alongside six other retail chains including Burlington Stores (BURL) and Best Buy (BBY). The firm also expressed a bullish stance on the Healthcare, Materials, and Consumer Staples sectors, believing these areas will benefit directly from the wealth growth and accelerating real income of the middle-income demographic.