Goldman Sachs and Barclays warn: last Friday's sharp drop in the US stock market should not be easily dismissed as a one-off abnormal fluctuation.

The selling last Friday caught investors who were used to momentum stocks only going up off guard. But investors should not easily dismiss it as a one-time abnormal fluctuation. The trading departments of Barclays and Goldman Sachs have issued the above warning, believing that crowded positions, narrow market breadth, and the prospect of high interest rates lasting for a longer period of time make it easier for the stock market to experience sudden pullbacks. Goldman Sachs trader Lee Coppersmith and others wrote in a report to clients, "These factors together create an environment where the impact of factor trading unwinds may be far more severe than the level of volatility shown at the index level." Last Friday showed investors that once market sentiment reverses, the stocks with the largest gains in the stock market may quickly turn around.