A Stock Market Bottom in Sight

The equity market correction is nearing its conclusion as the S&P 500 approaches key support levels between 7100 and 7300, signaling a transition from early to mid-cycle dynamics. While semiconductors have de-rated significantly, industrials emerge as a compelling opportunity due to durable earnings revisions, broadening ISM backlog data, and positive freight volumes. Investors should pivot toward quality cyclicals and AI adopters, moving beyond defensive positioning as the market discounts an economic slowdown that may have already occurred beneath the surface. Although a final retest of recent lows is possible, current valuations at 18X forward earnings and improving AI adoption metrics—shifting from productivity gains to measurable revenue generation—suggest that adding risk now is preferable to waiting for headline certainty. The post-midterm election period historically offers a more constructive environment for equities as uncertainty clears and capitulation levels near.