Vietnam Insight

The correction reflects concerns about overvalued AI stocks. US stock futures inched higher on Friday after a sharp selloff in the previous session, as renewed pressure on tech and AI-linked shares dragged Wall Street lower. On Thursday, the Dow fell 0.84%, the S&P 500 dropped 1.12%, and the Nasdaq Composite tumbled 1.9%. High-flying AI names led the decline, with steep losses from Nvidia (-3.7%), AMD (-7.3%), and Palantir (-6.8%). The pullback reflected renewed concerns about stretched AI valuations, compounded by worries over a deeper labor-market slowdown. Challenger data showed 153,000 announced job cuts in October, the highest for that month in 22 years, much of it attributed to AI integration and cost optimization. With the government shutdown restricting official data releases, investors turned to private indicators that signaled softer economic conditions, further dampening sentiment. All three major indexes are on track to end the week lower, with the tech-heavy Nasdaq down 2.83% so far.

Short-term decline. VNINDEX closed at 1,599.1 (-43.54 points, -2.65%) with liquidity lower than the 20-session average. The market had 59 advancing stocks and 270 declining stocks. The stock groups that exerted the largest downward pressure on the market were VIC, VHM, CTG; the groups that supported the market were GAS, FPT, NAB. Foreign investors returned to net selling at a level of 1,295 billion VND.

Trading Strategy: Short-term investors should prioritize observing the market and consider focusing on stocks that have managed to hold their base prices despite the recent market pullback. If the market successfully retests the 1,600-point support level, investors may start accumulating positions for medium- to long-term holdings, focusing on stocks benefiting from potential market reclassification, companies with strong earnings growth, or those trading at valuations lower than the overall market average.