Wall Street trading desks are pointing to the recent downturn in US stocks as a potential buying opportunity. The S&P 500 Index experienced a 3.4 per cent drop over four days, marking the longest slide since August. Concerns surrounding the artificial intelligence sector’s sustainability and the Federal Reserve’s monetary policies have contributed to the selloff. However, some analysts believe the fundamentals remain strong.
Andrew Tyler, head of global market intelligence at JPMorgan Chase & Co., considers the decline a “technical washout” in equities that may have concluded. JPMorgan Chase & Co. is a global financial services firm providing investment banking, asset management, and other financial services. Tyler noted that with no significant changes to the fundamental story, the firm is taking a dip-buying approach. He highlighted upcoming events such as earnings from AI leader Nvidia and the September non-farm payrolls report as potential catalysts for a market rebound.
The Goldman Sachs Group trading desk shared a similar outlook, noting that hedge funds are reducing risk while long-only investors are hesitant ahead of Nvidia’s earnings report. Goldman Sachs Group is a leading global investment banking, securities, and investment management firm. According to Goldman Sachs, the S&P 500’s top-of-book depth was $US6 million on Tuesday, below the one-year average of $US11.63 million, indicating heightened caution among investors.
John Flood, a partner at Goldman Sachs, observed a high level of discomfort and fear in the market. Despite this, he suggested that the current situation presents a “real buying opportunity” before Nvidia’s earnings release, maintaining that a year-end rally remains a strong possibility.
