The “bottom-hunting” strategy, which became a mantra in the pandemic era, won again on Tuesday.

Just before 10 a.m. New York time, mostly technology stocksNASDAQThe 100 Index fell more than 3%, erasing the gains made during the year. However, at about this point, the short-term trader came to the computer and the words “dig the bottom” were writtenTwitterHot searches. By 15:20, the NASDAQ 100 index was corrected. This was the first time since the epidemic scare in February last year that it had recovered such a large intraday decline. In the end, the index closed down 0.2%.

Since March of last year, US stocks have forged ahead and broken out of the trough time and time again. So far, they have risen 75%. The almost foolproof “bottom-hunting” strategy during this period has become a magic weapon for hedge funds and retail investors. Over the past few months, hedge funds and other institutional participants have been using market pullbacks to increase their holdings in tech stocks. Furthermore, the Nasdaq 100 index breaking the 50-day moving average and Federal Reserve Chairman Powell's promise in Congress on Tuesday that he would maintain a loose monetary policy may also have contributed to a rebound in the stock market.

“Powell gave investors the reassurance pill they wanted today,” said Adam Phillips, director of portfolio strategy at EP Wealth Advisors.