Goldman Sachs thinks investors should keep their seatbelts fastened. The bank laid out three big risks in a new note as markets wobble just a few percentage points below all-time highs.

The first risk sits in plain sight. Stocks are still priced for perfection, with the S&P 500 trading near 23 times forward earnings. That’s a steep valuation if the economy is slowing. Fresh data is only now returning after weeks of disruption from the government shutdown, and Thursday’s jobs report will be the first real test. Goldman says any confirmation of weaker growth could spark a sell-off.

The second risk revolves around AI spending. Tech giants like Meta, Amazon, Oracle, Microsoft, and Alphabet make up 17 percent of global equity value, and they’re pouring massive amounts of money into data centers. The market is betting those investments will pay off. Goldman says any hint of softer revenue or falling returns as capex rises could flip that story quickly and drag the broader market with it.

The third risk is how these companies are funding their AI ambitions. Borrowing costs have crept higher in the corporate bond market. If yields continue to climb, it could reshape the entire AI capex narrative by squeezing future profits or slowing down build-outs. Goldman warns that broader weakness in private credit or government funding could trigger a domino effect across sovereign yields and spreads.

If that happens, the bank says every major asset class could feel the hit at the same time.