Goldman Sachs strategist Ashok Varadhan urged investors to remain in the market despite concerns over interest rates, oil prices and the durability of the economy. The firm's co-head of global banking and markets said his constructive view rests on three factors: he does not expect the Federal Reserve to raise interest rates this year, he sees crude falling well below $70 a barrel later in 2026, and he believes artificial intelligence will eventually boost productivity enough to become a disinflationary force. Varadhan said rates should remain on hold even as market pricing had reflected some risk of renewed Fed tightening. After a weak jobs report on Friday, traders reduced those expectations, with CME Group's FedWatch gauge of futures prices showing odds for a September move at around 50% on Monday and 63% for October. He also said some inflation drivers, including the effects of tariffs, are starting to fade, while easing tensions around the Strait of Hormuz could further reduce price pressures. On energy, he said oil should retreat as the year progresses, even after West Texas Intermediate futures rose back above $80 a barrel Monday amid doubts the U.S. and Iran would reach a deal to increase ship traffic through the Strait of Hormuz. Varadhan added that the economy's resilience, combined with AI-led productivity gains, supports a positive view on credit, although heavy issuance means investors should still seek somewhat higher compensation for risk. He said that if external shocks ease, realized defaults can remain fairly low. The S&P 500 has recently returned to a record high, taking its 2026 gain to more than 13%.