Global Stock Traders Face Dip-Buying Dilemma After Selloff

A selloff that rocked equity markets worldwide is clouding the outlook for investors looking to buy stocks on the cheap, as worries over the US economy and disappointing tech earnings threaten more losses ahead, Lewis Krauskopf and Suzanne McGee reported for Reuters.

A recent two-day rout left the S&P 500 nearly 6% below its July peak, while the tech-heavy Nasdaq Composite extended losses to notch its first 10% correction from a record high since early 2022.

A recent two-day rout left the S&P 500 nearly 6% below its July peak, while the tech-heavy Nasdaq Composite extended losses to notch its first 10% correction from a record high since early 2022.

Equities plunged in Europe and Asia as well, with Japan’s Nikkei index losing nearly 5% at one point.

The market tumble presents a dilemma as another week of trading is set to unfold. Jumping into stocks during periods of weakness has rewarded investors over the last two years, as the S&P 500 has climbed about 50% from its October 2022 low.

However, buyers of the dip risk being steamrolled if recession fears grow following last week’s alarming US data.

The S&P 500 has fallen an average of 29% during recessions since World War II, according to Truist Advisory Services, David Randall and Caroline Valetkevitch also reported for Reuters.