After the sharp decline of the US stock market, will the repeatedly tried-and-true "buying on dips" strategy still work this time?

According to Zhitong Finance APP, last Friday, the S&P 500 index experienced a drop of over 1%, once again testing the long-term trend of the U.S. stock market formed over the past few months: whether investors will buy on dips. Compiled data shows that this benchmark index in the U.S. has not seen a consecutive drop of over 1% for 35 trading days, marking the longest streak since last December, a situation that has only occurred three times in the past year. Despite the increasing risks, the market's bullish sentiment still exists. What is concerning is that Trump's tariff threats against major U.S. trading partners could reignite inflation and harm corporate profits. However, this outlook has not triggered a sustained market downturn; before the drop last Friday, the S&P 500 index had set two historical highs earlier in the week. Dan Greenhaus, Chief Strategist at Solus Alternative Asset Management LP, stated, "Most investors seem to be waiting to see more specific tariff developments before making the worst-case assumptions. Given that there was no significant inflation surge during Trump's first presidential term, I suspect many investors are currently skeptical about the worst-case scenario." Kevin Gordon, Senior Investment Strategist at Charles Schwab, noted that despite the overall index rising, the average decline of S&P 500 constituent stocks has reached 9% this year, indicating volatility within the market. He mentioned that this dynamic is similar to 2024, when the benchmark stock index never fell more than 8.5%, but individual stocks had an average decline of 21%. "However, I don't think this situation will last," he said. "Given the tensions brought about by trade, immigration, and tax policies, there is a greater likelihood of larger fluctuations at the index level this year." Last Friday's drop was the worst day for the market this year, attributed to previously released economic data that was weaker than expected and rising consumer inflation expectations. In the face of economic uncertainty, investors still found reasons for optimism. Large-cap U.S. companies reported strong earnings in the fourth quarter, and traders hope that the White House's tax cuts and deregulation plans will boost valuations. Tanvir Sandhu, Chief Global Derivatives Strategist at Bloomberg Intelligence, stated, "Buying on dips has been a theme. As long as earnings are good, we may be in a period of pullbacks and declines rather than massive sell-offs." Venu Krishna, Head of U.S. Equity Strategy at Barclays, wrote in a recent report that, according to internal indicators, the market is exhibiting "strong 'buying on dips' behavior." Traders at JP Morgan also took a similar stance last Friday, noting that they observed a "buying on dips" reaction in the most crowded stock baskets. Tom Lee, founder of Fundstrat Capital and a consistent bull on the stock market, continues to assert that 2025 will be a market for buying on dips. For him, this means that stock long positions have not yet reached "disturbing levels," and more funds will flow into this asset class "Whenever there is any noticeable weakness in the market, these pullbacks are bought," he said last Friday, "I suspect the same will happen with this decline."