Monday’s stock market slide was abating as the afternoon rolled on, but tech stocks continued to lag behind.
The Dow was up 62 points, or 0.2%, heading into the final hour of trading. The S&P 500 was down 0.2%. The Nasdaq Composite was down 0.4%.
A mix of semiconductor and consumer staple stocks were struggling on Monday heading into a week that will feature earnings reports from about a third of the S&P 500 companies.
A pullback like today could actually be a buying opportunity, according to Rosenberg Research strategist Bhawana Chhabra. She argues that heading into tech earnings, expectations are holding up better than the broader market amid tariff worries that could weigh on profits for firms that import goods from China.
She notes that while artificial intelligence offered promises of productivity boosts, the hype led to overstretched valuations for AI stocks and the tech sector broadly.
“The recent drawdown in Tech prices (-16% from record highs) cannot be ignored, mind you, and has caught our eye,” she wrote. “With resilient earnings expectations and limited tariff exposure, especially for companies operating in the services space, we see pockets of opportunity emerging.”
Among the opportunities, according to Chhabra, is the SPDR S&P Software & Services ETF.
“We also recommend accumulating the sector (ETF Ticker: XLK) on sharp dips from a 12-24-month perspective,” she writes.