Retail Crowd’s Buying Power Signals More Gains for US Stocks

Core Viewpoint - Individual investors remain a bullish force in the US stock market, contributing significantly to market stability and potential continued gains [1][3]. Group 1: Retail Investor Activity - Retail traders have continued their buying spree into the new year, with purchases in the first four trading days of January reaching the second-highest level in nearly eight months [2]. - Daily buying by retail investors has consistently been above the 85th percentile, indicating strong conviction in the market [2]. - Since the start of the year, retail investors have purchased approximately $10.1 billion in US equities, primarily through exchange-traded funds, significantly exceeding the 12-month weekly average of about $6.5 billion [5]. Group 2: Market Influence and Performance - The confidence of retail investors has played a crucial role in stabilizing markets during recent pullbacks, suggesting that continued buying could lead to sustained gains in the US stock market [3][4]. - Retail inflows in 2025 were nearly double the five-year average, surpassing the previous record set in 2021 by 17% and exceeding 2024 levels by almost 60% [6]. - Retail investors achieved gains of over 20% in 2025, outperforming the S&P 500, with most gains occurring in the first four months of the year during significant market selloffs [7]. Group 3: Sector Focus - Technology stocks were the primary focus for retail investors in 2025, with notable interest in Nvidia Corp. and Tesla Inc., whose shares rose by 39% and 11%, respectively [8].