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Many Wall Street strategists believe that US stocks are ending short-term selling pressure after the midterm elections, and investors may take advantage of the low price to enter the market in batches; However, the AI market is still the main variable in whether the rebound can continue.
wall Street Many stock market strategists believe soUS stocks Short-term selling pressure that emerged following the midterm elections provided investors with an opportunity to buy at a discount, and clients are being urged to take advantage of the opportunity to enter the market.
US stocksstamp 500 The index rose slightly by 0.3% on the 6th, but was still 2.5% below the closing price on the 3rd. “This is the level at which you should be adding risk assets over the next two to three weeks,” said Wilson, chief U.S. equity strategist at Morgan Stanley. He was surprised by the decline of US stocks on the 5th, but he is confident that the US stock market will rise and he still aims that the S&P 500 index will reach 8,000 points by the end of this year, which is an increase of 8.4% from the closing price on the 6th.
He advised investors to buy consumer stocks, especially if interest rates and oil prices continue to fall. Wilson and many Wall Street experts believe that the US stock market stopped falling and rose slightly last Friday, proving that the selling pressure on the S&P 500 index in recent weeks is about to end, rather than indicating that the artificial intelligence (AI) market is collapsing.
Yardeni, chief investment strategist at Yardeni Research, said that “there has been an AI bubble before, and I think the bubble is bursting.” “The bursting of the bubble would have serious adverse effects on the economy and I don’t expect that to happen.” He believes “this is a retracement.” His year-end target for the S&P 500 index is still 7,900 points, and he prefers medical stocks.
“Investors still have plenty of energy to recalibrate their risk appetite,” said Rubler, a stock market and derivatives expert. “As uncertainty subsides and many of the market’s biggest buyers return, we believe U.S. equities will continue to move higher through the end of the year.”
The average forecast level of most strategists for the S&P 500 index later this year is 7,973 points, according to Bloomberg Intelligence data.
Analysts pointed out that the main obstacle to the rebound of the S&P 500 index is the continued weakness of the AI market. “Semiconductor and AI infrastructure stocks will remain under pressure. If the stock market bounces back sharply, it should be driven by high-beta stocks,” said An Kuang, chief stock market strategist at Wells Fargo. However, if investors are concerned about a continued contraction in AI facility spending, stocks like Alphabet and Amazon that plan to invest heavily may have more room to rise as they will be forced to cut spending. He estimates the S&P 500 will end the year at 7,700.
Summary FAQ
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They view the selling pressure after the midterms as a short-term correction, not a change in long-term trend. As uncertainty subsides and capital conditions readjust, it is likely that the market will rally before the end of the year.
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Wilson still maintains the goal of the S&P 500 index reaching 8,000 points by the end of this year, which is 8.4% higher than the closing price on the 6th. He also suggested that investors should increase their risk asset allocation over the next two to three weeks.
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Analysts believe the biggest hurdle is the continued weakness of the AI market, especially semiconductor and AI infrastructure stocks. If high-beta stocks recover or AI spending adjusts, the stock market is likely to see a significant upside.
