Institutional buyers step in after tech rout

Tech equities experienced a sharp sell-off earlier in the week as inflationThe rate at which prices rise across an economy. data disappointed, pushing CPI higher than expected and triggering Nasdaq-100 losses of 0.87%. The selloff was led by mega-cap names: NVIDIA, Tesla, and Broadcom all fell sharply, with the declines attributed to both macro headwinds and sector-specific concerns around valuation and capital intensity. However, by mid-week, institutional capital began stepping in to purchase the weakness, signalling that the pullback had created entry points worth exploiting.

The recovery narrative centers on AI infrastructure demand remaining intact despite macro turbulence. NVIDIA, the sector's linchpin, has benefited from Jensen Huang's high-profile inclusion in the Trump Beijing delegation, which sparked speculation about potential easing of China export restrictions. Broadcom, which supplies advanced packaging and materials critical to AI chip manufacturing, has seen similar attention. Apple and Microsoft have attracted buying pressure as investors rotated into relative stability and dividend yieldAnnual dividend per share divided by current share price. amid volatility.

Key technical levels are in play. NVIDIA is consolidating near the 225 level, with traders eyeing moves toward 230 or higher if support holds. Microsoft and Apple have shown relative resilience, with buyers stepping in at key support zones. The broader S&P 500 dip was absorbed with futures rising 0.2% ahead of the Trump-Xi summit, suggesting market participants believe downside risks have been absorbed.

Sceptics note that this dip-buying behavior often represents capitulation sellers running out of conviction, not a true bottom. Valuation metrics remain elevated on forward earnings; if rate cuts don't materialize due to sticky inflationThe rate at which prices rise across an economy., re-rating downside remains a risk. The energy shock could yet prove persistent enough to force earnings revisions lower across the tech sector, particularly for data-center-intensive operations.