Perhaps living up to the dubious reputation of Fridays in October, stocks were drubbed last Friday. The Nasdaq-100 (NDX) and the S&P 500 slid 3.56% and 2.71%, respectively. That was due to President Trump threatening China with 100% tariffs. And that’s a familiar problem for risk assets.
ETFs such as the Invesco QQQ Trust (QQQ) and the Invesco NASDAQ 100 ETF (QQQM) mega-cap tech stocks shed a staggering $770 billion in market cap in a single trading session.
That doesn’t mean QQQ and QQQM are down for the count. If the president’s 2025 trade rhetoric has taught investors anything, it’s that things can change on a dime. And that trade-induced market pullbacks, while frightening, have been buying opportunities. Speaking of buying opportunities, it’s understandable some investors may be under-allocated to stocks following the tariff volatility seen earlier this year. But some experts believe it’s time for those views to change.
Dip Buyers, New Entrants Could Fuel QQQ Rebound
One day doesn’t make a bear market. It doesn’t even mark a full-fledged correction. And that could prove to be good news for QQQ and QQQM. Adding to the case for the Invesco ETFs is ongoing enthusiasm among professionals for domestic tech stocks.
“Investors who are underallocated to equities may consider phasing in and using market dips to add exposure to CIO’s preferred areas of the market, including structural growth themes like AI,” according to the chief investment office of UBS.
The asset manager mentioned U.S. tech stocks as one of its preferred destinations. That’s meaningful to investors considering QQQ and QQQM because tech is by far the ETFs’ largest sector exposure. The ETF wrapper could also prove beneficial following the October 10 broader market slide. That’s because with QQQ or QQQM, investors don’t have to select individual securities or engage in market timing.
“A disciplined approach to phasing into stocks or balanced portfolios may help manage the risk of poor timing, reduce the influence of emotion, and provide more opportunities to benefit from market dips and rebounds,” added UBS.
Indeed, last Friday’s market goings-on spooked investors, and rightfully so. But QQQ and QQQM can help them take the long view. That’s a positive attribute when some compelling themes still appear sturdy.
The chief investment office “believes US lower interest rates, robust earnings growth, and AI tailwinds will support further upside for global equities over the coming year. Investors underallocated to stocks should consider phasing in and using market dips to build exposure to preferred areas, including CIO’s Transformational Innovation Opportunity (TRIO) themes of AI, Power and resources, and Longevity,” concluded UBS.
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