The steadfast bottom-fishing group wavers as retail investors net sell for the first time since 2023 in the U.S. stock market

【Hardcore value-buying camp wavering; retail investors see first net selling since 2023 in the U.S. stock market】Caixin News reported on March 25 that, as retail investors—recent years’ most steadfast bargain hunters in the U.S. stock market—face risks that are starting to outweigh returns. Data from Vanda Research shows that the group sold off $20.6 million worth of stocks on Monday, marking the first single-day net selling of individual stocks since November 2023. Despite the S&P 500 rising after U.S. President Donald Trump backed down from a threat to bomb Iran’s energy infrastructure, as the Middle East conflict continues, this group’s buying demand has been steadily falling. While they bought back again on Tuesday, given that these investors have rushed in every time the stock market has pulled back in recent years, signs of waning enthusiasm are worrying as pressure weighs on U.S. equities. “Since March, the trend has been a gradual decline in retail participation, along with systematic deleveraging, while on the other side, buying from pure long and hedge fund investors has been very limited,” Ruta Prieskienyte, a macro strategist at Vanda, wrote in a report published Tuesday. Increasing evidence suggests that individual investors are losing confidence in the outlook for the U.S. stock market. A Castle Securities metric measuring retail risk appetite has plunged sharply from its February peak. In the bull market of the past three years, retail investors’ “buying power” helped steady the market during turbulent periods. Given this group’s growing influence on Wall Street, their loss of interest could spell trouble. JPMorgan data shows that last year’s inflows of retail funds nearly reached twice the five-year average, setting a record—17% higher than the previous record level set in 2021, and nearly 60% higher than the 2024 level.