Buy-the-dip philosophy to be put to the test

Briefing.com Summary:

*AMD and the mega-cap stocks will provide a test of the buy-the-dip approach.

*Amgen and McDonald’s are pacing gains in the DJIA after their earnings reports.

*The ADP Employment Change Report for October has given the Fed something to think about.

The stock market had a bad day yesterday, with mega-cap stocks and growth stocks leading a broad-based decline. Valuation concerns, triggered by the weak response to Palantir’s (PLTR) terrific earnings report, were reportedly behind the selling interest. 

Well, let’s just say that valuation concerns aren’t corrected in a day, not when the Nasdaq goes down only 2.0% (after gaining 61% from its April low) and the market cap-weighted S&P goes down only 1.2% (after gaining 42% from its April low). If there is real valuation angst, the selling will persist, and it will intensify if there is a fundamental trigger.

Yesterday’s selling didn’t have a fundamental trigger. It was more about sentiment and the thinking that advances in some stock prices on a short-term basis had really gotten carried away. Today will be a test of the buy-the-dip philosophy.

Advanced Micro Devices (AMD) may be the tell on whether that approach will shine yet again or lose some of its luster. AMD is a semiconductor company and has also been identified as an AI growth leader. It put up better-than-expected and record Q3 results and issued above-consensus Q4 revenue guidance, yet it is trading 2.3% lower in pre-market action. It had been down more, pressured in part by the news that Amazon.com (AMZN), per its 13F filing, exited its position in AMD (820K shares).

If AMD can fight back, chances are other growth stocks will follow. Of course, we can’t forget the mega-cap stocks. They’ll hold sway on buy-the-dip sentiment, too, and have already helped in that regard. NVIDIA (NVDA) is up 0.5% in pre-market trading, and, lo and behold, the equity futures have rebounded from lower levels.

Currently, the S&P 500 futures are up six points and are trading 0.1% above fair value, the Nasdaq 100 futures are up seven points and are trading fractionally above fair value, and the Dow Jones Industrial Average futures are up 44 points and are trading 0.1% above fair value.

The latter have been helped by positive responses to the earnings reports from Amgen (AMGN) and McDonald’s (MCD). Those stocks are up 2.0% and 2.6%, respectively. Those companies have headlined a very busy reporting period since yesterday’s close that also included results from the likes of Cava Group (CAVA), Skyworks Solutions (SWKS), Super Micro Computer (SMCI), Pinterest (PINS), Rivian (RIVN), and Qualys (QLYS).

The full lineup can be found on Briefing.com’s Earnings Results Calendar. Generally speaking, the responses have been mixed, and that is reflected in the standing of the equity futures market.

Separately, market participants will be digesting economic data (yes, economic data!) today, but not for the reason you might think. The government shutdown continues and is now in record territory (day 36 and counting). Today’s releases are from the private sector and include the October ADP Employment Change Report, the October S&P Global U.S. Services PMI at 9:45 a.m. ET, and the October ISM Services PMI at 10:00 a.m. ET.

The ADP report was better than expected. Private-sector employment increased by 42,000 positions in October (Briefing.com consensus: 26,000) following an upwardly revised loss of 29,000 positions (from -32,000) in September. Year-over-year pay growth was flat at 4.5% for job-stayers and 6.7% for job-changers, indicating a balance between the supply and demand for labor.

The key takeaway from the report is that the job gains were concentrated in large establishments. Small establishments and medium establishments saw losses of 10,000 and 21,000, respectively.

This isn’t a report that will make the Fed’s December rate decision any easier. Granted, overall job growth isn’t that robust, but it may be the “new normal” for the labor market given the reduced supply of labor stemming from the crackdown on illegal immigration, which is to say there may not be any meaningful change in the low unemployment rate.

The fed funds futures market continues to lean in favor of a December rate cut, placing a 68.0% probability on a cut at the December FOMC meeting after the ADP report versus 68.6% a day ago. In other words, the fed funds futures market was not unduly influenced by today’s ADP reading.

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Originally Posted November 5, 2025 – Buy-the-dip philosophy to be put to the test