Markets rise, investors “conditioned to buy the dip”

Markets rose on Wednesday.

The S&P 500 rose 0.8 percent, the STOXX Europe 600 jumped 1.6 percent and the Nikkei 225 rose 0.6 percent.

Investors shrugged off the continuing rise in COVID-19 cases even as local US officials are asking Americans to once again wear masks indoors as the Delta variant surges in the country.

“Perhaps investors have just come to embrace the notion that the reaction function to a new wave of the virus is unlikely to be the same as the reaction function employed in the spring of 2020,” said Goldman Sachs’ Chris Hussey.

“We will get a follow-on rally as investors have been conditioned to buy the dip,” said Rich Steinberg, chief market strategist at The Colony Group.

In contrast, Matt Maley, equity strategist at Miller Tabak, said that “what we’ve seen here are the early warning shots of a correction that we’ll see probably... in late August, September, October”.