Despite recent market volatility, particularly in technology stocks, HSBC’s multi-asset strategists see a buying opportunity. The S&P 500 index is nearing its record high, but market sentiment and positioning have been significantly impacted. High-yield bond spreads have widened slightly, while emerging market bond spreads have narrowed, creating an unusual market environment. HSBC highlights that VIX futures show a spot premium, indicating traders anticipate greater uncertainty in the short term compared to long-term expectations. This stems from concerns around highly speculative segments of the market. However, bottom-up consensus expectations suggest the S&P 500’s net profit (excluding technology) will decline by 8% quarter-on-quarter. HSBC believes this signals a relatively low bar for fourth-quarter earnings in early 2026. Furthermore, anticipated Federal Reserve rate cuts in December are expected to ease market tensions and improve sentiment. HSBC concludes that the current environment is favorable for taking on more risk rather than reducing existing positions.