Goldman Sachs dips after HSBC downgrades stock rating

** Wall Street giant Goldman Sachs' GS.N shares fall 0.4% to $707.84 premarket, after HSBC downgrades stock's rating to "reduce" from "hold"

** Brokerage says it is adopting more cautious stance on U.S. big banks after sizable rally as valuations are increasingly stretched

** Says operating fundamentals continue to appear healthy but good news is more than priced in

** After brief pause in investment banking activity in April, capital markets are roaring back to life as uncertainty abates

** Absence of material increase in investment banking activity over sustained period could lead to a correction in GS stock, HSBC says

** GS set to report Q2 earnings on July 16

** 10 of 22 brokerages rate stock "buy" or higher, 11 "hold" and 1 "sell"; median PT $620.65 - data compiled by LSEG

** As of last close, GS stock up 24.2% YTD