The stock market has been suffering immense volatility so far this year. The broad market indices have entered correction territory due to concerns about surging inflation and the Fed's hawkish policy tilt. Last week, Fed Chairman Jerome Powell indicated an interest rate hike of 50 basis points in May would be forthcoming to restore price stability. Furthermore, the spread of COVID-19 in China and other parts of the world and the reintroduction of strict lockdown measures could hurt the global economic growth and further dampen investor sentiment owing to the fears of economic slowdown. Over the past five days, the NASDAQ Composite Index has retreated 8.3%, while the S&P Index has plunged 6.4%.
Amid the current environment, investors are favoring the companies with solid profits and cash flows, coupled with impressive growth prospects. Such financially strong companies could potentially hedge against the market’s uncertainties. The recent selloff in growth stocks has created an excellent opportunity to buy these fundamentally sound stocks at bargain prices.
