“Put simply, zero earnings growth will drive zero appreciation in the stock market,” David Kostin, chief U.S. equity strategist, wrote in the team’s 2023 Outlook.

The S&P 500 Index is forecast to turn out flat returns and no growth in earnings in 2023 after declining about 17% this year, according to Goldman Sachs Research. Our strategists expect the benchmark to fall about 9% in the next three months before rebounding after the Federal Reserve’s tightening cycle ends in May. Revenue of S&P 500 firms is predicted to rise 4%, in line with nominal GDP growth, but margins will likely shrink, eliminating growth in earnings per share.