According to a note from Goldman Sachs on Thursday, US equities are headed for another big sell-off if economic data fails to improve quickly to justify the latest leg of the rally.

Goldman's Cecilia Mariotti noted that "In the absence of clear signs of positive macroeconomic momentum, temporary increase in risk appetite may actually increase the chances of another downturn rather than signaling the end of a bear market."

The bank disappointed those investors who hoped the 14% rally that kicked off in mid-June is the start of a new bull market, urging them to brace for another big sell-off if economic data doesn't show immediate improvement.

This is especially true if the almost two-month rise in stock prices was driven by systematic traders rather than fundamental investors, as traders can get out of long positions more quickly and move into a bear market.

But even subdued investor sentiment and traders' low equity exposure in 2022 are not enough for the market to reach a sustainable bottom.

Mariotti urges not to rush and wait for further developments in the macroeconomic situation, given the discrepancy in the pricing of growth stocks compared to the still heightened risk for investors in growth stocks, which the market is likely to face in the second half of the year. She noted that the bank continues to prioritize a defensive portfolio allocation for 3 months before expecting a sustained turn in the market.