Wall Street's "Buy the Dip" Sentiment Returns: US Stocks Revisit All-Time Highs, Institutions Raise S&P 500 Target

BlockBeats News, August 15th. Investors are re-entering the U.S. stock market, with the panic caused by the July tech stock plunge quickly fading away, and the market returning to a "buy the dip" mode.

Data shows that the S&P 500 Index has risen by about 4% since August, hitting a new high this week; the Nasdaq 100 Index has also strongly rebounded from the July dip, currently only about 2.5% below its June peak.

The strong second-quarter earnings, easing inflation, and increasing rate cut expectations have been the main drivers of the market rebound. Data shows that the demand for U.S. information technology stocks has reached the highest level in nearly five years, with institutional investors increasing their bets on derivatives related to the stock market's rise.

Michael Metcalfe, Global Head of Macro Strategy at State Street Global Advisors, stated that tech stocks are currently "looking invincible," and the strong profit performance is strengthening the market's belief that AI investment is a long-term structural trend.

This week, U.S. inflation data eased, leading the market to reduce its bet on further interest rate hikes, pushing the S&P 500 above the 7800 level. Meanwhile, oil prices have fallen from last month's $100 high to around $88, reducing investors' concerns about the Middle East situation.

Institutions have also raised their U.S. stock targets:

Citigroup has raised its year-end 2026 S&P 500 target to 8100 points;

JPMorgan Chase has increased its S&P 500 target from 7800 points to 8000 points.

The second-quarter earnings season has further boosted market confidence. Overall, S&P 500 constituent companies have seen earnings grow by over 50% year-on-year, with earnings growth still around 30% even when excluding investment gains from Amazon and Google parent company Alphabet.

The AI-related sector has once again become the core of the rebound. Since August, Super Micro Computer has risen by about 37%, SanDisk by about 33%, and cloud computing companies CoreWeave and Nebius Group have all risen by over 40%.

However, the rapid shift to optimism in the market has also raised concerns among some institutions. Henry Allen, a strategist at Deutsche Bank, said that the market is currently pricing in a "goldilocks scenario": sustained economic growth, only a slight tightening of central bank policy, alleviation of the supply shock in the Middle East, and falling oil prices, but this combination has "very little room for error."

Currently, Wall Street is regaining upward momentum driven by AI profit-taking, easing inflation, and increasing risk appetite. However, elevated valuations and geopolitical risks may still pose sources of future market volatility.