Friday's sell-off hit chip stocks first, then spread around the world. Wall Street's answer was not panic but a shopping list.
The drop started with chipmaker Broadcom. Its results came in weak, so investors dumped AI stocks.
The Broadcom news hit a nerve. It raised fresh doubts about AI spending.
The selling spread fast. Asia felt the pain first, then Europe's chipmakers slid too.
Friday was the Nasdaq's worst day since April 2025. Stocks had climbed nine weeks in a row before that.
By Tuesday, the mood flipped. U.S. futures rose, Europe's tech gained, and South Korea's Kospi index jumped more than 8%.
The bounce was broad. Tech led the way back up.
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To many investors, the drop looked like a sale. Robert Edwards, who runs a $3 billion fund, called it "a gift."
He said his team keeps buying on dips. To him, sharp drops and sharp rallies are just what a strong bull market feels like.
He still sees the S&P 500 at 7,700 by year-end. He even expects a drop of 7% to 12% on the way.
"Volatility is the price of admission," Edwards said. In plain terms, swings come with the gains.
Citi went further. It raised its year-end S&P 500 target to 8,100 from 7,700, about 10% above today.
Not everyone got that loud. Anthony Willis, an economist at Columbia Threadneedle, called the drop a repricing, not a broken story.
Not everyone is relaxed. Strong jobs data on Friday spooked investors.
They worry the Fed, the group that sets U.S. rates, could raise rates again this year. Higher rates tend to weigh on stocks.
Citi also sees a split market, with big bets on both sides. It said $14.7 billion in new short bets piled up, the most this year.
But traders also added new buy bets at the same time. So the market split into two camps.
One camp fears the economy. The other keeps buying every dip.
Most Nasdaq longs are still in profit. But if this week's tech earnings flop, the bounce could fade.
By midweek, buyers had stepped back in. The worst of the scare looked past, at least for now.
Tuesday's gains were a good sign. But they were no all-clear just yet.
Edwards runs his fund out of Florida, and he has seen plenty of scares before. His message to clients is simple: stay invested and stay calm.
For now, the dip-buyers are winning, but earnings get the next word.
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