Nasdaq 100 wipes out 1.8% loss as dip buyers step in

The Nasdaq 100 erased a decline of as much as 1.8% to trade positive on Wednesday, extending a pattern of intraday reversals that historically signal further gains.

"Nothing seems to shake this market," Max Kettner, head of cross-asset strategy at HSBC, said in a note, pointing to the resilience of U.S. equities as a deepening rout in technology stocks unfolded.

The reversal followed a session Tuesday in which the Nasdaq 100 briefly entered correction territory, falling more than 10% from its record high, before closing 1% lower. The Philadelphia Semiconductor Index sank into a bear market, down more than 20% from its peak, as chip stocks from Samsung Electronics to SK Hynix each plunged more than 15%. Kioxia plummeted 18%, while Sandisk ended the day down 14%. AMD, ARM Holdings, Micron and Seagate each fell more than 8%. Dell Technologies, a leading producer of data center servers, tumbled 8.1%. The selloff was triggered in part by a report that a Chinese state-backed firm had begun mass production of domestic chipmaking tools, raising concerns about increased competition in the semiconductor equipment market. South Korea's Kospi index extended its decline from its most recent record high to more than 30%, a drop that unfolded over just 25 trading days following a 300% rally that started in April 2025.

The broader U.S. market showed resilience. The S&P 500 rose 0.2% and the Dow Jones Industrial Average added almost 540 points, powered by gains in IBM, Coca-Cola and Boeing. Apple rallied about 1% to briefly surpass $5 trillion in market value, overtaking Nvidia as the world's largest public company. Coca-Cola beat analyst earnings per share and revenue expectations and raised its full-year forecast, a sign that consumer spending remains intact. The Russell 2000 also ended the day up 0.2%.

The sharp intraday turnaround in the Nasdaq 100 suggests dip buyers view the technology selloff as overdone, with the index's ability to reverse losses potentially stabilizing near-term sentiment. Investors now look to earnings reports from Meta Platforms and Microsoft later this week for the next market trigger, with Alphabet's $205 billion capital expenditure plan already setting the stage for elevated spending across cloud providers. JPMorgan estimates that artificial intelligence-related spending by companies will approach $870 billion by year-end 2026, up 77% from a year ago. Historical data from Seeking Alpha indicates that similar Nasdaq reversals have preceded further upside, with the index often rallying in the weeks following such moves.

This article is for informational purposes only and does not constitute investment advice.