Goldman Sachs: "Postmodern" Cycle Drives Capital Expenditure Supercycle, Reshaping Returns

Goldman Sachs strategists Peter Oppenheimer and Sharon Bell released a report on June 18, 2026, announcing the end of the "modern" supercycle (low inflation, low rates, globalization). A "post-modern" cycle, marked by higher macro volatility, increased real interest rates, and stronger state intervention, is now reshaping equity returns. The report identifies an emerging capital expenditure (CAPEX) supercycle, shifting market rewards from share buybacks to physical investment, primarily driven by artificial intelligence (AI) and geopolitical factors. The report details seven structural shifts, including a higher cost of capital and increased macro volatility. Goldman data indicates S&P 500 companies' Q1 2026 CAPEX rose 38% year-over-year, while buybacks grew just 1%. AI-driven private CAPEX from major tech firms is projected to reach $75.5 billion in 2026, an 84% increase from 2025, expanding into energy, industrial, and infrastructure sectors. This, combined with rising geopolitically-driven public investments, suggests subdued index-level returns but increased market dispersion, favoring active management and themes like AI, defense, and electrification.