Analyst: When the US stock market pulls back, technology giants, healthcare, and high-yield stocks are the "preferred choices for bottom fishing."

Recently, the US stock market has been continuously falling. After experiencing four weeks of decline, although the S&P 500 index almost recovered last week's 3% drop from the beginning of the week, it is still about 6% below its historical high. Faced with macroeconomic and geopolitical uncertainties, analysts expect market volatility to continue and advise investors to adopt defensive strategies and seize the opportunity to buy stocks that are still heavily hit.

Rob Conzo, CEO and Managing Director of The Wealth Alliance LLC, said, "During market downturns, it may be wise to consider adjusting investments and optimizing asset allocation to seize opportunities."

However, trading in volatile markets carries risks. Stocks may further decline, providing more buying opportunities, or they may suddenly surge, causing investors to miss the opportunity to buy at low prices.

In response to this, Quincy Krosby, Chief Global Strategist at LPL Financial LLC, pointed out that frequent trading may not be suitable for long-term investors, as their goal is long-term holding rather than profiting from short-term fluctuations. She advised, "If your investment portfolio is aimed at long-term growth, you can be patient and wait for market volatility to subside."

Market observers currently see opportunities in the following four areas:

1) Semiconductor Industry

Analysts at Citigroup believe that the semiconductor industry has become attractive after a recent significant decline. The Philadelphia Semiconductor Index has fallen by about 20% since its peak in July, mainly due to macroeconomic pressures, high profit expectations, and risks of a downturn in the automotive market.

However, despite the recent decline in the semiconductor industry, analysts remain optimistic, believing in its long-term growth potential, especially in the AI and memory sectors. Analysts stated in their report, "Our positive view on the semiconductor industry remains unchanged as we believe the key drivers of industry growth - strong demand for artificial intelligence and memory - still exist."

Micron Technology is Citigroup's top recommendation. In addition, companies such as AMD, Broadcom, ADI, Micron, NVIDIA, and KLA are also rated as buy by Citigroup.

2) Healthcare Industry

The healthcare industry is often seen as a safe haven during market turmoil. When stocks in other parts of the market seem overvalued, investors tend to turn to the healthcare industry. Over the past month, the S&P 500 healthcare index has risen by about 3%, while the overall market has fallen by over 4%.

David Harden, Chief Investment Officer of Summit Global Investments, believes that the trend of investors turning to healthcare stocks is not over. He is particularly bullish on the growth potential of weight loss drugs, especially Eli Lilly, whose stock price plummeted during the market sell-off but then rebounded strongly due to better-than-expected performance and an upward revision of 2024 revenue forecasts. Harden holds shares of Eli Lilly and believes that its stock price rally is far from over, as the company has a clear growth trajectory and huge potential.

3) Large Cap Tech Stocks

In recent weeks, the technology sector and the "Big Tech Seven" have seen significant declines in stock prices. The Bloomberg index tracking these companies has fallen by about 15% since its peak in July The recent decline has brought the price-to-earnings ratios of these companies back to more reasonable levels, as their stocks were considered too expensive for some investors before. Currently, the price-to-earnings ratios of these companies are around 28 times the expected earnings for the next 12 months, lower than the five-year average of 30 times.

Rhys Williams, Chief Strategist at Wayve Capital Management, mentioned that the stocks of tech giants have recently dropped significantly, making their prices more reasonable now. Therefore, if you haven't invested much before, now may be a good opportunity.

4) Stocks Sensitive to Interest Rate Changes

During uncertain macroeconomic environments, some interest rate-sensitive stocks, such as utility companies, Real Estate Investment Trusts (REITs), and dividend-paying company stocks, become more attractive. The S&P 500 Utilities Index has risen by about 16% this year, outperforming the broader market, and the real estate sector is also expected to perform well.

Joe Quinlan, Chief Market Strategist at Bank of America Private Bank, stated, "As we move towards the end of the year and 2025, real estate may emerge as a dark horse, as the Federal Reserve has hinted at rate cuts and mortgage rates have already declined. Holding or buying high dividend stocks during periods of market volatility can help balance the market's fluctuations. In times of economic uncertainty, having stable dividend income can help you sleep better at night."