Recently, the US stock market has fallen continuously. Despite recovering almost 3% of the decline from the beginning of the week last week, it is still about 6% below its historical high. In the face of macroeconomic and geopolitical uncertainties, analysts expect market volatility to continue and recommend investors to adopt defensive strategies and seize the opportunity to buy stocks that are still heavily hit. $S&P 500 Index (.SPX.US)$ The CEO and Managing Director of The Wealth Alliance LLC, Rob Conzo, said, "When the market falls, consider adjusting investments and seizing opportunities to optimize asset allocation, which is a wise choice."

However, there are risks in volatile market trading. Stocks may fall further, providing more buying opportunities, or they may suddenly rise, missing the opportunity to buy at low prices. Quincy Krosby, Chief Global Strategist at LPL Financial LLC, pointed out that frequent trading may not be suitable for long-term investors because their goal is to hold long-term, not profit from short-term volatility. She suggested, "If your investment portfolio aims for long-term growth, you can be patient and wait for market volatility to settle down."

Market observers currently see opportunities in the following four areas:

In response, Quincy Krosby, chief global strategist at LPL Financial LLC, pointed out that frequent trading may not be appropriate for long-term investors, as their goal is to hold long-term rather than make profits from short-term fluctuations. She suggests: "If your investment portfolio is aimed at achieving long-term growth, you can be patient and wait for the market fluctuations to settle down."

Market observers currently see opportunities in the following four areas:

1) The semiconductor industry

According to analysts at Citigroup, the semiconductor industry has become attractive after recent dips.$PHLX Semiconductor Index (.SOX.US)$It has fallen by about 20% since the high in July, mainly due to macroeconomic pressures, high profit expectations, and the risk of a downturn in the auto market.

However, despite the recent decline in the semiconductor industry, analysts still have a positive outlook and believe that it has long-term growth potential, especially in the field of AI and memory. Analysts pointed out in a report: "Our positive outlook on the semiconductor industry remains unchanged because we believe that the key factors driving the development of the industry, strong demand for artificial intelligence and memory, still exist."

$Micron Technology (MU.US)$It is recommended as Citigroup's preferred choice. In addition, Eli Lilly and Co. etc. are also given a buy rating by Citigroup. $Advanced Micro Devices (AMD.US)$N/A.$Broadcom (AVGO.US)$and$Analog Devices (ADI.US)$N/A.$Microchip Technology (MCHP.US)$,$NVIDIA (NVDA.US)$And.$KLA Corp (KLAC.US)$The company was also given a buy rating by Citigroup.

2) The healthcare industry

The healthcare industry is often seen as a safe haven in volatile markets. When stocks in other parts of the market appear too high, investors often 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 more than 4%.

David Harden, Chief Investment Officer of Summit Global Investments, believes that the trend of investors turning to healthcare stocks has not ended. He is particularly optimistic about the growth potential of weight loss drugs, especially Eli Lilly and Co., whose stock prices have fallen sharply in market sell-offs, but later rebounded strongly due to better-than-expected performance and upward revision of 2024 revenue forecasts. Harden holds Eli Lilly and Co.'s stock and believes that its stock price still has a long way to go because the company has a clear growth trajectory and huge potential.$Eli Lilly and Co (LLY.US)$The company, whose stock price plummeted in the market sell-off, has rebounded strongly due to better-than-expected performance and an upward revision of its 2024 revenue forecast. Harden holds shares in Eli Lilly and Co and believes that the upward momentum of the stock price is far from over, as the company has a clear growth trajectory and huge potential.

3) Large technology stocks

In recent weeks, the technology industry and its "magnificent seven" have seen a sharp decline in stock prices. Bloomberg's index tracking these companies has fallen by about 15% since the high in July.

This decline has also brought their price-to-earnings ratios back to more reasonable levels. Previously, their stocks were too expensive for some investors. Now, their price-to-earnings ratio is about 28 times the expected earnings in the next 12 months, lower than the average of 30 times in the past five years.

Rhys Williams, Chief Strategist at Wayve Capital Management, said that the stocks of technology giants have recently fallen a lot and are now more reasonably priced, so if you haven't invested much before, it may be a good opportunity now.

4) Stocks sensitive to interest rate changes.

When the macroeconomic environment is uncertain, some stocks sensitive to interest rates, 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 about 16% this year, outperforming the large-cap market, while the real estate sector is also expected to perform well.

Joe Quinlan, Chief Market Strategist for Merrill Lynch and Bank of America Private Bank, said:"As we move towards the end of the year and 2025, real estate may become a dark horse, as the Fed has hinted at interest rate cuts and mortgage rates have already declined. Holding or purchasing high dividend stocks can help balance market volatility. In times of economic uncertainty, having a stable dividend income can help you sleep more comfortably. "

Editor/Somer