Retail traders are selling stocks for the first time since 2023
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Retail investors on March 23 notched its first day of net selling of single stocks since 2023, dumping US$20.6 million worth of shares.
PHOTO: REUTERS
- Retail investors showed net selling of single stocks on March 23, dumping US$20.6 million worth of shares, signalling ebbing enthusiasm.
- Retail participation has gradually receded in March amid market volatility, along with systematic deleveraging from other investors.
- Despite a record year in 2023, cooling interest from retail investors could spell trouble due to their growing influence on Wall Street.
AI generated
NEW YORK – For retail investors, the US stock market’s most reliable dip buyers in recent years, risks are starting to outweigh the rewards.
The cohort on March 23 notched its first day of net selling of single stocks since November 2023, dumping US$20.6 million (S$26.3 million) worth of shares, according to data from Vanda Research. That came as the S&P 500 Index rallied after US President Donald Trump eased back on his threat to bomb Iran’s energy infrastructure.
Demand from this segment had been subsiding steadily as the conflict in the Middle East dragged on. And though they were back to buying on March 24, the hint of ebbing enthusiasm from a group that has pounced on every pullback over the past few years is worrisome at a time when US equities are already under pressure.
“The trend since the start of March has been one of gradually receding retail participation, alongside systematic deleveraging and only modest buying from long-only and hedge fund investors on the other side,” Ms Ruta Prieskienyte, a macro strategist at Vanda, wrote in a note published on March 24.
On the same day, mom-and-pop investors snapped up roughly US$262.3 million in shares as at 12.50pm Eastern Time as the S&P 500 edged lower. The American equities benchmark is down almost 5 per cent this month.
There is more evidence individual investors are losing confidence in the outlook for stocks. A Citadel Securities gauge of retail’s risk appetite has declined sharply from February highs.
Retail’s buying power has helped stabilise markets during bouts of volatility across the three-year bull market. Cooling interest from the investor group could spell trouble considering its growing influence on Wall Street.
In 2025, individual buyers posted a record year, with inflows nearly double the five-year average, according to data from JPMorgan Chase & Co. The figure eclipsed the prior record set in 2021 by 17 per cent and exceeded 2024 levels by almost 60 per cent. BLOOMBERG
