US stocks (^DJI,^GSPC, ^IXIC) are looking to recover after mixed economic data and cooling in August's jobs print last week triggered a sell-off. Gradient Investments senior portfolio manager Jeremy Bryan joins Wealth! to break down the outlook for equities and how investors can best navigate the current state of the market.

"Stocks certainly are not in the bargain bin yet... I can't argue for that at all because we're at elevated valuations still at this point from the S&P 500 as a whole. And we're still up over in the double digits for the year so far, even though we've come down here a little bit," Bryan says of the most recent pullback.

For investors looking to get into the defense sector, he points to stocks like Northrop Grumman (NOC), L3Harris (LHX), and the RTX Corporation (RTX). He argues, "Those companies are at reasonable valuations already... they have different trajectories and they should be OK given the current environment."

When it comes to investing in chip stocks, Bryan encourages investors to examine their portfolios and weigh the risks they're willing to take. "I'm not saying the AI stocks are bad. In fact, we own plenty of them here, but we don't own them to the extent that even the S&P 500 has them. We're underweight Nvidia (NVDA). We're underweight Apple (AAPL)," he explains. He notes that now may be a good time for investors to take profits from their overexposed positions and reinvest in other areas of the market.

For more expert insight and the latest market action, click here to watch this full episode of Wealth!

This post was written by Melanie Riehl