If the USD should continue to appreciate, it will diminish the value of company revenues generated in weaker overseas currencies and makes U.S. exports more expensive to foreign buyers.

“Direct impacts of a stronger dollar on index-level equity performance are small, but indirect impacts could be larger should USD appreciation weigh more heavily on economic growth, particularly in the U.S,” Goldman analysts said. “U.S. stocks with high domestic sales offer better growth and value and fundamentals than firms with high sales exposure to Western Europe.”

On the other hand, mid- and small-cap companies tend to be U.S. focused and are more closely tided to the well being of the U.S. economy. With the U.S. economy on the rise and low energy prices fueling growth, smaller company stocks could continue to outperform.

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Max Chen contributed to this article.