The average investor appears to be rethinking their bullishness amid daily headlines of record diesel prices and surging 10-year Treasury yields.
Retail investors have purchased just $1 billion of single stocks over the past 20 days, per new data from Vanda Research. It marks the lowest 20-day total in at least two years.
By comparison, retail’s 20-day purchases stood at a little over $20 billion in April 2025. The trend has since been lower, but recently picked up the pace.
Total retail equity purchases have declined to about $10 billion over the past 20 trading days, around their lowest reading dating back to October 2024.
“Retail investors are becoming more cautious,” strategists at the Kobeissi Letter said.
Meanwhile, institutional money is betting on markets making it through the latest spate of economic worries relatively unscathed.
The S&P 500 (^IXIC) continues to trade near record highs despite elevated oil prices and surging bond yields, underpinned by robust corporate earnings growth this year.
Analysts project aggregate third quarter S&P 500 earnings growth of nearly 29% year over year, providing a strong fundamental floor that absorbs elevated discount rates.
Further helping the S&P 500 is the return of the “Magnificent Seven” trade amid AI optimism, which has lit a renewed flame under names like Meta (META) and Nvidia (NVDA).
Retail investor caution, while appreciated, may be overlooking one element: As long as tech stays hot, there are likely more gains for the overall market.
“As much as everyone keeps trying to keep talking about other areas of the stock market, the tech sector is what will continue to drive it … one way or the other … for the foreseeable future,” Miller Tabak chief strategist Matt Maley said. “Therefore, whether the MAGS can hold onto these recent gains … and (especially) whether the chip stocks can regain some significant upside momentum … should be the key as to how the stock market acts over the rest of this year (and beyond).”
Brian Sozzi is Yahoo Finance’s Executive Editor, host of the Power Players with Brian Sozzi podcast, and a member of Yahoo Finance’s editorial leadership team. Follow Sozzi on X @BrianSozzi, Instagram, and LinkedIn. Tips on stories? Email brian.sozzi@yahoofinance.com.
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