Since 2025, investors seem to be relying on Wednesday, a key day of the week to buy the S&P 500 index on dips.

Recently, due to the stock market turbulence caused by US President Trump's tariff plan, traders tend to sell stocks to cash out before considering other factors to prepare for the weekend. According to data compiled by Ryan Detrick, chief market strategist at Carson Group, the cumulative three-year increase this year to date has reached an astonishing 127%. However, US stocks generally did not perform well at the beginning and end of the week, with an annualized decline of more than 40% on Monday and Friday.

The widely watched stock market bully Detrick said, “Market tension on Friday, or before the weekend, is usually not a sign of market health. This shows that investors are hesitant because now, from tariffs to DeepSeek, there will be a lot of news over the weekend.”

Although the sample of observations from 2025 to now is limited, this is in stark contrast to the stock market rebound in 2023 and 2024, when traders usually buy stocks in large numbers at the beginning of the week.

However, this year, traders often use potential market fluctuations in the middle of the week to buy low and sell high. For example, trading activity often increases on earnings days and when investors respond to news released in Washington, which may create opportunities to buy on dips on other days.

On the one hand, Wednesday has a strong history of providing dips buying opportunities for the S&P 500 index. According to data compiled by Jacob Manoukian, head of US investment strategy at J.P. Morgan Private Banking and Wealth Management Company, US stocks rose 53% of the trading day from 1980 to February 2024. As of 2023, Wednesday was the trading day with the highest positive share of US stocks, accounting for 55%.

Clearly, traders have been using Friday to profitably close and consolidate positions in response to a weekend likely full of trade developments. The S&P 500 index closed down four of the past six Fridays. “The market hates tariffs,” said Thomas Thornton, founder of hedge fund Telemetry, who is shorting the S&P 500 index and the Nasdaq 100 index. “The situation is getting harder, and people are more willing to sell.”

According to data compiled by the agency, in 2025, SPDR S&P 500 ETF Trust (SPY), the largest exchange-traded fund that tracks the benchmark stock index, fell an average of 17 basis points on Friday, the worst performing year for that day since 2001. He said that the average gap of SPY from Friday's closing to Monday's opening was as high as 65 basis points, far higher than the historical level of the past few years.

Although Wednesday may show a pattern of buying on dips, this is not a guaranteed winning strategy. Market history shows that investing on this alone is unlikely to be a reliable way to reap portfolio returns in the long run.

Of course, institutional investors have been selling off gains this year, while retail investors have been buying on dips. Goldman Sachs's OTC brokerage report for the week ending February 7 shows that after five consecutive weeks of net sales, hedge funds bought a large number of US stocks last week.

An analysis by Emma Wu, a global volume and derivatives strategist at J.P. Morgan Chase, shows that overall, retail investors bought more on dips on Tuesday and Friday this year, and they usually rarely buy on Monday. Retail activity has slowed this week, with net purchases of only $0.832 billion on Monday, the lowest level since January 13, she said.

Jim Worden, Chief Investment Officer of Wealth Consulting Group, said, “We have had some difficult Mondays, once DeepSeek and another time due to tariff concerns, so some customers may be too nervous about some issues. We believe the statement “buy on Wednesday when it's low” is relatively true. But for more systematic traders, they probably just don't want to keep long positions in the face of uncertainty.”