Business · Markets · 12 hrs ago
Wall Street strategists see a buying opportunity after US stock selloff
US stocks fell after Democrats won control of both chambers of Congress in the midterm elections, amid expectations that they could slow investment in artificial intelligence.
The S&P 500 dropped 4.4% on Thursday and the Nasdaq 100 fell 6.4%, while the S&P 500 was still down 2.5% since election day after a small rise on Friday.
The Thursday selloff wiped about $3 trillion from the S&P 500’s market value.
Some strategists say the decline is part of a market correction, not evidence of a wider retreat from AI investment.
Morgan Stanley’s Mike Wilson sees the next two to three weeks as a time to take on more risk and kept his year-end S&P 500 target of 8,000.
Ed Yardeni also called the decline a correction and said he did not expect it to cause significant harm to the economy.
Strategists’ average year-end target is 7,973, suggesting they expect the index to recover from current levels.
Wall Street strategists say the recent US stock selloff may offer an opportunity to gradually increase risk.
The S&P 500 fell 4.4% on Thursday and the Nasdaq 100 dropped 6.4%, amid expectations that Democrats’ election gains could slow investment in artificial intelligence.
The S&P 500 rose 0.3% on Friday but remained 2.5% below its level when polls closed on Tuesday.
Strategists including Morgan Stanley’s Mike Wilson maintained their positive outlook and year-end targets for the index.
The strategists described the selloff as a correction rather than evidence of a wider decline in AI investment.
- Who
- Wall Street strategists, including Mike Wilson, Ed Yardeni and Jonathan Golub.
- What
- They see the US stock selloff as a potential buying opportunity and maintain positive outlooks for the S&P 500.
- When
- After the US midterm elections; the selloff included a sharp drop on Thursday and a partial rebound on Friday.
- Where
- US stock markets.
- Why
- Expectations that Democrats’ control of both chambers of Congress could slow AI investment contributed to the selloff.
This story does not have two clearly opposing sides.
The S&P 500 was 2.5% higher than its level after the subsequent selloff.
The S&P 500 fell 4.4% and the Nasdaq 100 dropped 6.4%, wiping about $3 trillion from the S&P 500’s market value.
The S&P 500 rose 0.3%, but remained 2.5% below its level when polls closed on Tuesday.
- S&P 500 Thursday fall
- 4.4%
- Nasdaq 100 Thursday fall
- 6.4%
- S&P 500 market value lost
- About $3 trillion
- Mike Wilson year-end S&P 500 target
- 8,000
- Ed Yardeni year-end S&P 500 target
- 7,900
- Jonathan Golub year-end S&P 500 target
- 8,200
What people are saying
This is where you should increase risk over the next 2-3 weeks
I don't expect this to turn into a deterioration that will have significant negative effects on the economy
I have not changed my positive view on stocks because of the move after the elections