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.
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.
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.
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.
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.
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.
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.