Investors have been instantly rewarded for buying the dip in 2025 with the highest return in more than 30 years.
Research from Bespoke Investment Group shows that so far this year, the S&P 500 (^GSPC) has risen an average of 0.36% in the next trading session following a down day for the index. According to Bespoke’s data, which dates back to 1993, the only other time stocks rebounded even close to this aggressively was the 0.32% average rise seen after down days during 2020.
As Bespoke wrote on X, the data is proof that the “buy the dip” mentality has been at the forefront of the market narrative in 2025. This played out as recently as Tuesday when the S&P 500 rose more than 2% after falling 0.7% to end last week’s trading before the holiday weekend.
The catalyst for Tuesday’s rally was President Trump dialing back tariffs he had previously threatened, a key driver of many rebound days this year.
“We saw our customers buying heavily during April,” Interactive Brokers chief strategist Steve Sosnick told Yahoo Finance. “They were astute. They didn’t give up faith. Buy the dip has worked for them very well for the past few years, and it did work really well for them again.”
Read more: The latest news and updates on Trump’s tariffs
Since the market’s most recent bottom on April 8, the S&P 500 has risen nearly 19%. Largely, retail investors have been leading the charge. Data from JPMorgan quantitative strategist Emma Wu showed retail investors have poured more than $50 billion into US equities since the April 8 low. This surpassed the $46 billion retail investors put into the market between March and June 2020.
“The buy-the-dip strategy in early April has clearly paid off,” Wu wrote.
Similar data from VandaTrack showed the week following Trump’s April 2 “Liberation Day” tariff announcement saw “record dip-buying flows from retail investors,” including $3 billion in net purchases on April 3, the largest daily total since VandaTrack began collecting this data in 2014.
Josh Schafer is a reporter for Yahoo Finance. Follow him on X @_joshschafer.
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