Skip to main content
NY Home homeNews home
Story

Buying the stock market dip hasn't paid off this much in 30 years

Thu May 29, 2025

Josh Schafer

Updated 2 min read

In This Article:

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

Traders looks at a tablet on the floor of the New York Stock Exchange (NYSE) at the opening bell in New York City, on May 6, 2025. Wall Street stocks fell again early, giving back some of the gains as the US trade deficit soared amid a flood of imports ahead of US tariffs. The overall trade gap for the United States jumped 14.0 percent to $140.5 billion for March, a record for a month (Photo by TIMOTHY A. CLARY / AFP) (Photo by TIMOTHY A. CLARY/AFP via Getty Images)

The S&P 500 has roared back from its April 8 low, with the benchmark index up nearly 19% since President Trump began delaying the bulk of his tariff threats. (Timothy A. Clary/AFP via Getty Images) ยท TIMOTHY A. CLARY via Getty Images

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.

Click here for the latest economic news and indicators to help inform your investing decisions

Read the latest financial and business news from Yahoo Finance