Goldman Sachs published an analysis on Tuesday evaluating the economic consequences of winter storm Fern, which brought freezing conditions and significant snow and ice across a broad swath of the United States from New Mexico to Maine. The report arrives as the S&P 500 - via the SPDR S&P 500 ETF Trust (SPY) - trades close to its 52-week high, sitting just 0.98% below a peak value of $697.84, underscoring continued market resilience amid weather disturbances.
In its assessment, Goldman Sachs concluded the timing of the storm limits its effect on headline payroll figures for January. Because Fern formed nearly a full week after the payroll survey reference week, the bank says most workers will have been captured as employed in both the establishment and household surveys, reducing the likelihood of a significant statistical hit to nonfarm payroll growth for the month.
The bank nevertheless expects Fern to influence upcoming economic releases. Snow and colder-than-normal temperatures tend to weigh on near-term activity, yet Goldman Sachs notes a key distinction between snowstorms and many other natural disasters: storms of this type typically suppress economic activity without generating widespread physical destruction that would trigger costly, rebuilding-driven demand. That dynamic, the bank argues, should limit persistent negative effects.
Goldman Sachs singled out housing as the sector most vulnerable to the storm's disruption. The report now projects first-quarter residential fixed investment to decline by -3% quarter-over-quarter on an annualized basis. That forecast reflects an expectation that weather-driven delays in construction and home purchases will dent reported residential activity in the quarter.
By contrast, the investment bank expects only modest impacts on consumer spending, manufacturing output, and business survey indicators. The analysis cites offsetting behaviors that mute losses: consumers often build inventories of supplies ahead of a storm, supporting retail demand in the run-up, while elevated demand for power during harsh weather can partially compensate for other declines in activity.
Goldman Sachs' view of limited, short-lived disruption aligns with broader market signals. SPY has recorded a 17.7% total return over the past year, and data tracking the ETF shows a "GOOD" overall financial health score of 2.8, a measure Goldman Sachs uses to indicate resilience across the index. The bank's comments underscore that price volatility for the S&P 500 has been historically modest, consistent with the market's ability to absorb transitory shocks such as severe weather.
Alongside the storm analysis, the report notes a series of other economic and market developments. Argentina acquired $808 million in drawing rights from the United States, a transaction that coincided with mixed performance across Latin American markets. The MSCI Latin American currencies index fell by 0.3%, while regional equity markets were described as relatively subdued.
Domestically, the Federal Reserve Bank of Dallas reported that its trimmed mean PCE price index - an alternative core inflation measure that removes extreme price moves - rose at an annualized rate of 1.5% in November. This reading adds to the set of inflation indicators policymakers and markets monitor.
On the labor front, ING analysts characterized the U.S. job market as cooling into what they describe as a "low hire, low fire economy." This observation followed data from the JOLTS report showing job vacancies fell to 7.15 million, below consensus expectations of 7.65 million.
Goldman Sachs offered forward-looking market expectations as well, projecting an 11% increase in the S&P 500 index by 2026. The bank attributes that anticipated rise in part to projected U.S. GDP growth of 2.6% in 2026, with potential supportive factors including tariff relief and productivity gains from artificial intelligence.
Finally, the report referenced Bank of America's outlook for global policy: Bank of America expects the Bank of Japan's next rate increase in June 2026, with a terminal rate of 1.5% and a semi-annual cadence for hikes depending on wage and price developments.
Goldman Sachs' analysis frames winter storm Fern as a weather event likely to impose concentrated, short-term headwinds - particularly in housing - while broader economic indicators and markets are expected to remain largely resilient.