The U.S. market’s recent surge and dip show the swings are real — but recovery follows. If you’re investing for the long term, don’t chase panic or hype. Stay diversified, stay patient, and let your plan keep you grounded.
The U.S. stock market just rode a rollercoaster couple of weeks. Last week saw a sharp drop driven by worries over political gridlock and high valuations.
But markets bounced back, as hopes grew that the U.S. government shutdown could end, stocks found their footing, corporate earnings held up, and global sentiment improved.
What’s caused the pullback and rebound?
Political uncertainty: The ongoing U.S. government shutdown injected a dose of doubt into markets, with investors worried about the economic fallout if it dragged on. Political gridlock tends to rattle short-term confidence, even if history shows markets usually bounce back once a deal is struck.1
Valuations & risk: After a strong year for tech giants, share prices may have been seen by some as being at their height. That means even minor disappointments or cautious comments from the Fed/CEOs can spark sharper-than-expected reactions. When valuations are high, nerves can be too.1
Relief & rebound: As signs of political compromise began to surface and economic data stayed resilient, confidence returned quickly. Investors saw the sell-off as a chance to buy the dip, especially in sectors tied to long-term themes like AI.2
Why it matters to you
Market swings aren’t a reason to panic; it’s a reason to stay focused on your plan. Volatility is part of the deal when it comes to investing, and while big dips can feel uncomfortable, they offer the chance to accumulate more assets at a lower price.
What really drives long-term success are strong business fundamentals, solid earnings, sustainable models, and steady demand – not the noise of short-term headlines.
Remember, diversification remains your best ally; when one corner of the market stumbles, others will hold firm, helping smooth out the ride over time.
How Chip can help
At times like this, the smartest move isn’t trying to guess what market will wobble next, it’s making sure you’re spread across many of them.
At Chip, you’re investing in diversified funds that hold companies from different regions, sectors and asset classes, so your money doesn’t have to be tied to the fortunes of any single market.
We offer a range of globally diversified funds which you can check out on the ‘Invest’ tab in your app and see how you could put your money to work with a Stocks & Shares ISA or General Investment Account.
And as an added bonus, start now and pay 0% platform fees* until 31 January 2027. Eligibility & T&Cs apply.
Best,
Stephen.
*Fund management charges apply.
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Important to know: When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than your original investment.
1Tax treatment depends on individual circumstances and may be subject to change in the future.