VIDEO: Here's Our Game Plan as the S&P 500 Touches a 5% Pullback

The S&P 500 fell below its 50-day moving average and hit the 6,574 level—a roughly 5% pullback—before bouncing; the team says a sustained rebound or successful retest of that level is needed to signal the worst is likely behind us. Several Pro Portfolio holdings (Axon, Meta, ServiceNow, Arista, Eaton) have moved into oversold territory amid a broader market reset driven by stretched valuations, stickier inflation and a downtick in Fed rate-cut odds to below 50%. Nvidia’s upcoming earnings—the stock is down low-double-digits into the print—could provide an inflection point for AI- and data-center–related names, and the portfolio managers will monitor the data and selectively add to well-positioned companies if attractive entry opportunities emerge.

Analysis

The S&P 500 breached its 50-day moving average and touched the 6,574 level today, marking roughly a 5% pullback from the recent high before bouncing; the team notes the short-range oscillator moved further into oversold territory and several Pro Portfolio positions—Axon, Meta, ServiceNow, Arista and Eaton—have entered oversold conditions. Portfolio managers characterize the move as a market-driven reset after stretched valuations, with sticky inflation and a reduction in Fed rate-cut odds to below 50% cited as principal drivers alongside thin economic data.

Nvidia is singled out as the next potential inflection: the stock is down low-double-digits into its earnings print, and management commentary that reaffirms AI adoption and rising data-center demand could catalyze a broader recovery for AI- and infrastructure-linked names such as Arista and Marvell. The team also flags company-specific risks—Home Depot results illustrate that pockets of the market still require expectation resets despite broader technical signals.

Tactically, the strategy is to wait for confirmation of the 5% pullback being behind the market (sustained rebound or successful retest at 6,574) before redeploying capital, while selectively preparing to add to well-positioned names where demand is demonstrably rising and portfolio capacity exists; risk management and data-driven reassessment will guide any rebalancing decisions.

Key Decisions for Investors

• Investors should wait for a sustained rebound above—or a clean retest of—the 6,574 S&P 500 level before materially increasing equity exposure
• Use Nvidia's upcoming earnings and management commentary as a catalyst read: add AI-infrastructure exposure (e.g., Arista, Marvell) only if the report confirms durable AI demand and data-center growth
• Consider selectively buying oversold, high-conviction holdings mentioned (AXON, META, NOW, ANET, ETN) on confirmed stabilization or clear demand signals, while maintaining portfolio cash or hedges until the market technicals improve