(Reuters) -Chief executives of Morgan Stanley and Goldman Sachs ( GS ) cautioned on Tuesday that the global equity markets could be heading towards a correction, underscoring a growing concern that investor optimism has driven valuations to sky-high levels.

Fears of a market bubble come as the benchmark S&P 500 continues its meteoric climb, repeatedly hitting record highs and evoking memories of the dot-com boom.

"We should welcome the possibility that there would be drawdowns, 10% to 15%, that are not driven by some sort of macro cliff effect," Morgan Stanley CEO Ted Pick said at the Global Financial Leaders' Investment Summit in Hong Kong.

Markets have so far largely brushed aside concerns about inflation, elevated interest rates, policy uncertainty from shifting trade dynamics, and the ongoing federal government shutdown, now in its fifth week.

"When you have these cycles, things can run for a period of time. But there are things that will change sentiment and will create drawdowns, or change the perspective on the growth trajectory, and none of us are smart enough to see them until they actually occur," Goldman CEO David Solomon said at the summit.

Earlier this week, the co-chief investment officers of hedge fund Bridgewater Associates had also warned that investors are overlooking mounting risks to the current market stability and the limits of the artificial intelligence boom, particularly in the U.S.

(Reporting by Manya Saini and Niket Nishant in Bengaluru; Editing by Arun Koyyur)