News report 📈 Stocks 🌍 United States

S&P 500 and Nasdaq-100 Stabilize Near Three-Month Lows After 5 November Sell-off

The S&P 500 and Nasdaq-100 are consolidating near three-month lows as investors weigh slowing earnings growth against potential Federal Reserve support and bullish calls to add risk.

🕐 1 min read

2 assets impacted (Stocks). Net bias: 0 Bullish, 0 Bearish, 2 Neutral. Strongest signal: SPX → 3/10 (55% confidence).

📊 Affected Assets (2)

SPX
Neutral 🤖 55%
📅 Short-term 🌍 US · Explicit

The index has stabilised near three-month lows after the 5 November sell-off, while bulls argue earnings strength and market breadth justify buying dips. Fed Chair Kevin Warsh's stance suggests a deepening sell-off would tighten financial conditions and reduce the need for rate rises, potentially reviving a 'Fed put'. Mixed bull/bear signals point to consolidation rather than a clear direction.

Catalysts
  • • Morgan Stanley advising clients to add risk over the next 2-3 weeks
  • • Potential return of the 'Fed put' if the sell-off deepens
Risk Factors
  • • Corporate earnings growth is slowing
  • • A Democratic victory is seen slowing data centre construction, implying weaker results for many companies
NDX
Neutral 🤖 50%
📅 Short-term 🌍 US · Explicit

The Nasdaq-100 has stabilised near three-month lows alongside the S&P 500 after the Black Thursday sell-off on 5 November. The open question is whether AI stocks are in a temporary blip or a longer downtrend, and slowing data centre construction would hit chipmakers and other tech names hardest. Bears and bulls are roughly balanced in the article.

Catalysts
  • • Stabilisation near three-month lows after the 5 November sell-off
  • • Possible Fed support if financial conditions tighten further
Risk Factors
  • • Slower data centre construction implied by a Democratic victory would weaken results for chip manufacturers
  • • Earnings growth is slowing across corporates

🧭 Full analysis of these assets

🎯 Key Takeaways

  • The S&P 500 and Nasdaq-100 have stabilized near three-month lows following the 5 November sell-off.
  • FactSet data shows second-quarter corporate profitability reached an all-time high.
  • Morgan Stanley advises investors to add risk to portfolios over the next 2–3 weeks.
  • Fed Chair Kevin Warsh suggests a deeper market sell-off could reduce the need for aggressive monetary tightening.

📝 Executive Summary

The S&P 500 and Nasdaq-100 have stabilized near three-month lows following the 5 November market slump. While corporate earnings growth is slowing, analysts from Morgan Stanley and Yardeni Research suggest buying the dip, citing record second-quarter profitability and the potential for a 'Fed put' if financial conditions tighten further.

❓ FAQ

SPX · Is the S&P 500 sell-off over?

The index has stabilised near three-month lows after the 5 November drop, and bullish strategists like Morgan Stanley and Yardeni Research argue it is a buying opportunity, but the article notes the market is shifting into a lower gear and it is unclear whether the sell-off was a blip or the start of a downtrend.

SPX · How could the Fed help the stock market?

Fed Chair Kevin Warsh believes markets should do some of the central bank's work, so a deeper sell-off would tighten financial conditions and reduce the need for the monetary tightening priced by derivatives markets, potentially reviving a 'Fed put' for equities.

NDX · Are AI stocks in a bubble that has burst?

Yardeni Research maintains the AI bubble has not burst, it has simply lost some air, but the article stresses it is unclear whether the 5 November sell-off was a temporary blip or the start of a longer downward trend for AI stocks.