Goldman Sachs President John Waldron stated that markets are prepared for potential further declines, with investors closely watching the upcoming critical earnings report from tech giant NVIDIA.

Speaking during an interview at the Bloomberg New Economy Forum in Singapore on Wednesday, Waldron remarked, "In my view, it’s entirely possible for the market to experience a further pullback from current levels. Technically, the current inclination leans toward adding more protection and hedging against downside risks."

The S&P 500 has fallen more than 3% this month, heading toward its worst performance since March, while market volatility has surged. A sell-off among the world’s largest tech companies has reignited debates over whether current revenues and profits justify massive investments in AI-related infrastructure.

"What we’re seeing now is a market correction, which I believe is healthy given the significant gains this year," Waldron said. "The market is intensely focused on the AI narrative: Can we achieve returns that justify the capital invested? Have these expectations already been fully priced in? This is a major debate."

He added that NVIDIA’s upcoming earnings report "will be a very important moment for the market."

Earlier at the same forum, Bob Diamond, former CEO of Barclays and now managing Atlas Merchant Capital, described recent global market turbulence as a "healthy adjustment" as investors reassess the valuation of technological transformation.

"We’ve seen a repricing of risk assets," Diamond said. "In my view, this is a healthy adjustment rather than the beginning of a bear market."

Diamond also warned that ballooning sovereign debt fueled by fiscal spending is "a dark cloud hanging over the market."

Wall Street’s so-called "fear gauge," the Cboe Volatility Index (VIX), briefly surged above 24—a level that typically unsettles traders—reaching a one-month high.

"AI’s impact should be measured over a two-, three-, or even five-year horizon," Diamond noted. "I believe AI will be a strong deflationary force and critically important in boosting global productivity. Some may currently be confused about valuations."

He expressed "very, very high optimism" about AI’s potential to enhance productivity, curb inflation, and drive global growth, suggesting markets have yet to fully grasp certain metrics, particularly those related to data centers.

Waldron expects any further declines in US stocks to be relatively limited. "I don’t foresee a particularly steep drop from current levels," he said.