ZACKS·2025-08-05 11:01Market Overview - The S&P 500 experienced a shift in momentum, entering a four-day losing streak after six consecutive all-time highs, driven by soft jobs data, rising unemployment, and new tariffs announced by President Trump [1] Investment Opportunities - Morgan Stanley and Goldman Sachs suggest that the recent market decline could present a buying opportunity, with SPDR S&P 500 ETF Trust (SPY) rebounding after the initial drop [2] - Morgan Stanley strategist Michael Wilson advocates for buying during the recent selloff, citing a strong earnings outlook for the upcoming year despite short-term challenges [3] Economic Recovery Insights - Wilson indicates that signs of a "rolling recovery" are emerging, supported by earnings revisions and expectations of fading inflation later this year, which may lead to a rate-cutting cycle [4] - Structural tailwinds such as AI adoption, a weakening U.S. dollar, and potential tax cuts are expected to support equities moving forward [5] Earnings Performance - Second-quarter earnings for S&P 500 companies are projected to increase by 9.1%, significantly surpassing analysts' forecasts of 2.8%, with the highest percentage of firms exceeding earnings estimates in four years [6] Sector-Specific Outlook - Goldman Sachs strategist David Kostin expresses optimism regarding mega-cap tech firms, noting their ability to manage tariff impacts on profits, while acknowledging potential revenue growth pressures in the latter half of the year [7]