WSJ：Buy the Dip’ Investors Save Stocks From a Brutal Week

Major indexes reversed course early Friday to finish the week mixed

A selloff that thrashed U.S. stocks and extended into international markets ran headlong Friday into one of the most powerful forces in America’s multiyear rally. 

After the opening bell rang in New York Friday, shares in Nvidia, Oracle and other companies at the heart of the artificial-intelligence boom careened low enough to flash a green light for dip-buyers. Stocks quickly pared much of their losses, clawing back enough ground for major indexes to finish the week mixed. 

The moves came with investors in some corners of Wall Street increasingly scrutinizing whether big tech’s eye-watering spending on chips, data centers and more will ultimately pay off. Adding to the uncertainty, a Wall Street deprived of federal data during the shutdown is now staring down a deluge of information about a U.S. economy showing signs of slowing. 

While those factors have contributed to periodic pullbacks in stocks’ record-breaking run this year, the hiccups have been fleeting. If Friday was any indication, it appears there are still enough relative bargain hunters to step into the breach.

“This has happened a couple of times, but then buyers have come back,” said David Bahnsen, chief investment officer for the Bahnsen Group. “At some point, they won’t come back.” 

The S&P 500 inched less than 0.1% higher this week, while the Nasdaq composite ticked 0.5% lower. The Dow Jones Industrial Average rose 0.3%.

Trading this week suggested at least some investors took the opportunity to rotate money away from the market’s jet fuel this year—AI—and into more defensive sectors. Companies spanning healthcare, materials and energy led the S&P 500. 

At the same time, some businesses linked to the circular deals emanating from tech darling OpenAI faced steep declines. Oracle shares fell 6.9% this week, while data-center cloud-services provider CoreWeave plunged 26%. Friday afternoon’s rebound helped Nvidia fight its way into the green.

Investors like Bahnsen who are skeptical of Silicon Valley’s spending spree believe that a top-heavy market reliant on periodic moments of dip-buying is bound to tip over.  

I don’t know that this is the moment,” Bahnsen added. “But I do know the moment is overdue and inevitable.”

Nvidia’s quarterly earnings next week will provide a key barometer for whether the AI trade has room to run. Traders also await a series of delayed economic reports, including September jobs data slated to be published Nov. 20, that will shape expectations for the Federal Reserve’s next meeting in December. 

Investors in recent weeks pared back their bets on an interest-rate cut after Fed Chair Jerome Powell said that it was “not a foregone conclusion—far from it.” On Friday, market-implied probabilities viewed the prospect of a cut as a coin flip. 

Kansas City Fed President Jeff Schmid said Friday that inflation isn’t only above a longstanding 2% target, but is also seeping into electric bills, healthcare costs and other areas not directly affected by tariffs.