Stocks faced a significant downturn on Friday following President Donald Trump’s announcement of potential increased tariffs on Chinese imports, which stirred anxiety in the market. This marks a departure from the relatively calm summer months traders had been accustomed to. The announcement comes in response to recent controls imposed by China on its rare earth exports, escalating tensions between the two countries.
The Dow Jones Industrial Average experienced a sharp drop, plunging 879 points, or 1.9%, closing the week down by 2.7%. Meanwhile, the S&P 500 dipped 2.7% on Friday, and the Nasdaq Composite saw an even steeper decline of 3.6%. For the week, these major indexes closed in the red, with declines of 2.4% and 2.5%, respectively.
Despite this downturn, analysis from CNBC Pro highlighted that some stocks could be considered oversold, potentially indicating the opportunity for a rally ahead. The sentiment is informed by the 14-day relative strength index (RSI), a technical metric used to determine whether a stock is overbought or oversold. An RSI below 30 typically suggests a stock may be oversold, while readings above 70 indicate overbought conditions. Following the recent selloff, all examined stocks had an RSI below 70.
Among the oversold stocks identified was PNC Financial Services, with an RSI of 21. The stock has decreased by 5% in 2025, sparking Piper Sandler to upgrade shares from neutral to overweight ahead of the firm’s upcoming third-quarter earnings report, scheduled for release next Wednesday. Analyst Scott Siefers noted that despite solid fundamentals, shares had struggled, remaining flat year-to-date and ranking as one of the weakest large regional banks monitored by the firm. Historically, PNC has traded at a premium, and Siefers expressed confidence that the stock should regain this position.
Another notable name on the list was Lowe’s, the home improvement retailer, which has dropped about 6% this year, also recording an RSI of 21. In September, Wolfe Research began covering Lowe’s with an outperform rating, indicating a positive outlook based on expectations of improved performance compared to competitors like Home Depot. Analyst Spencer Hanus pointed to encouraging same-store sales in the second quarter and anticipated investments to drive gains. However, Hanus cautioned that the latter half of the year may present tougher comparisons and noted that the market is forecasting a recovery in same-store sales for the coming year. Investors are keenly aware of expectations for multiple rate cuts before the year concludes, thereby keeping a close eye on long-term trends.
Other oversold stocks identified through the analysis included Cintas, a provider of uniforms and workplace supplies, and Match Group, known for its dating services. As the market digests these shifts and the broader implications of policy changes, investors may find potential opportunities among these oversold stocks as they await a possible turnaround.
