Undaunted Retail Investors Bruised By S&P 500’s Big Reversal

Individual investors are proving to be relentless when it comes to pouring money into a turbulent US stock market that's been rocked by President Donald Trump's tariff salvos.

Emboldened by Wednesday's big rally in the S&P 500, retail traders kept buying even as stocks slid Thursday. They ended the session with $4 billion in net purchases, the fourth time they've broken that threshold this year, according to data from JPMorgan Chase & Co.'s Emma Wu. 

“Retail traders remained undaunted by the market plummet,” said Wu, the bank's global quantitative and derivatives strategist. “Despite the selloff, they continued to buy aggressively.”

However, the market reversal shows the downside to their unceasing confidence. After logging a 17% gain Wednesday and drawing nearly even on the year, the latest equities selloff pushed them further away from recouping their 2025 losses. 

“Given their persistent dip-buying throughout the crash, we estimate their portfolios are still far from breakeven,” said Wu.

Granted, individual investors sticking to their buy-the-dip approach amid escalating trade tensions have been doing better than the broad market. The S&P 500 is down 10% for the year as economic worries have mounted.

All told, retail investors pumped $11 billion in equities since April 2, the day Trump unleashed sweeping reciprocal levies on trading partners, data through Wednesday's close show. That is a significantly higher level than the 12-month average, and has been surpassed only about 1% of the time. 

Retail traders' interest in buying single stocks also remained strong on Thursday, especially in long-time favorites such as Tesla Inc. and Palantir Technologies Inc., the JPMorgan data showed. 

As the S&P 500 whipsaws, individual investors — who rose to prominence during the Covid-19 pandemic for using social media to swap trading advice — are still diving into stocks, while larger institutional investors rotate into international markets and less risky assets such as Treasuries.

“There has been a paradigm shift among retail investors, particularly younger investors, to buy in periods of stress dating back to the pandemic,” said Mark Hackett, chief market strategist at Nationwide. “Wednesday was another reinforcing data point for this group, accelerated by the short covering by institutions, causing the massive rally.”