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A bull statue and a bear statue stand outside the Frankfurt Stock Exchange on April 7, 2025 in Frankfurt, Germany. Florian Wiegand | Getty Images News | Getty Images
Global stock markets edged higher on Tuesday, marking a tentative recovery from a bout of volatility led by an aggressive sell-off in global technology names. Friday saw U.S. equities come under pressure, led by a sharp downward turn in chip stocks. The negative momentum bled into Asian trade, while European tech stocks also took a beating. It came after a downbeat earnings report from Broadcom sparked a rotation out of AI-linked stocks. By Tuesday, global shares appeared to be recovering from the sell-off. U.S. stock futures were last seen trading broadly higher, with futures tied to the tech-dominated Nasdaq 100 adding 0.7%. European tech stocks were on track for their second consecutive day of gains, with the regional Stoxx 600 Technology index clawing back a fraction of the losses incurred on Friday, while South Korea's tech-heavy Kospi index jumped more than 8% on Tuesday following two days of losses.
'Volatility is the price of admission'
Although many investors remain bullish on equities, there are expectations of more turbulence on the ride to greater returns. Robert Edwards, Chief Investment Officer at Florida-based Edwards Asset Management, said in a note that the tech stock pullback was "a gift for investors." "We remain buyers on the dips," he said, describing market movements as a "sawtooth pattern." "Sharp pullbacks have been met with aggressive buying because investors, despite the noise, know that strong fundamentals, including strong revenue and earnings growth, remain in place," he said. "This is what bull markets in their prime look like, featuring violent moves higher and lower, which can be uncomfortable, but the overall trend is upward." Edwards Asset Management, which manages assets worth $3 billion, is expecting the S&P 500 to reach 7,700 points by the end of the year — representing upside of around 4% from Monday's closing price. Edwards said that although his forecast suggested much of the market's gains were already priced in this year, he expected further volatility to create "ample buying opportunities." "These buying opportunities may come from a looming 7% to 12% correction driven by uncertainty over new Fed Chair Kevin Warsh and further delays in opening the Strait of Hormuz, where oil stays elevated long enough to re-ignite inflation concerns," he said. Edwards also noted that while upcoming mega-cap IPOs are "adrenaline for a bull market hitting its prime," signals for the "euphoria" that typically denotes a market ceiling were not yet present. "We're at the start of a frenzied buying spree worth riding," he said. "Our message to investors is to stay invested, stay disciplined, and don't flinch at pullbacks. Earnings are real, sidelined cash is enormous, exciting IPOs are just beginning, and macro tailwinds are more likely ahead — Hormuz reopening, falling oil, and a cutting Fed. This is where the big runs are born. Volatility is the price of admission."
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