Wall Street Buys the Dip in Stocks After AI Rout

Cameron Dawson, Chief Investment Officer at NewEdge Wealth, talks market momentum and risk factors heading into 2026.

At a time when every dip in stocks is perceived as an opportunity, buyers emerged after a brief pullback led by some of the biggest winners of the artificial-intelligence boom. Bitcoin rallied. Bonds fell.

About 300 shares in the S&P 500 rose. While Wall Street didn’t see a buying stampede on Wednesday, equities were able to bounce after a slide that underscored worries over how stretched the market has become and how sensitive it is to unfavorable news.

“For investors with cash on the sidelines, the recent market pullback seems like a good time to buy, especially for investors with a longer time horizon,” said Robert Edwards at Edwards Asset Management. “Earnings are crushing it and growing faster than revenues and that often leads to multiple expansion.”

Traders also kept an eye on the latest economic reports, with US services activity expanding in October at the fastest pace in eight months on a swift upturn in the growth of new orders. Meantime, employment at US companies increased, signaling some stabilization in the job market.

And the US Treasury indicated it’s not looking to boost sales of notes and bonds until well into next year, in a decision that will see the government increasingly rely on bills to fund the budget deficit. Dealers had widely expected the move.

The S&P 500 hovered near 6,790. The yield on 10-year Treasuries rose five basis points to 4.14%. Bitcoin gained 2.5%. The dollar wavered.

Concerns about an ever-narrowing cohort of stocks driving the gains have become louder, while a hawkish pivot in Federal Reserve commentary has put a dent in optimism over rate cuts. Technical indicators are increasingly flagging reasons for caution, adding to the drag on sentiment from warnings by Wall Street chief executives about frothy valuations.

“Some consolidation should not come as a surprise, in our view, especially after a strong run over the past several months,” said Ulrike Hoffmann-Burchardi at UBS Global Wealth Management. “While political uncertainty and shifting investor sentiment could inject further volatility into the market, we continue to believe that the fundamentals supporting the rally remain intact.”

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