Another major concern is corporate profitability. Goldman Sachs' David Kostin said his firm's wage survey leading indicator is at 3.3 percent, its highest level during this economic cycle.
"Labor costs will continue to rise and put downward pressure on the margins of many companies," Kostin said in a note Friday.
Kostin also warned about the potential negative impact from President Donald Trump's trade war with China. The White House's latest tariffs of 10 percent on $200 billion of imports from China took effect in late September. Trump, in a Sept. 17 statement, said the tariffs would rise to 25 percent on Jan. 1.
"The aggregate impact of tariffs on S&P 500 profits will depend on the specific rate and scope of products covered," he said. "If a 25% tariff is placed on all imports from China, our estimate of 2019 S&P 500 EPS, currently $170, could fall as low as $159, eliminating all expected earnings growth."