According to Zhitong Finance APP, as the U.S. stock market faces increasing pressure from trade turmoil and concerns about an economic slowdown, retail investors are doubling down, despite their growing losses. JP Morgan's retail trading data shows that for the week ending March 19, retail traders injected over $12 billion into the U.S. stock market. Emma Wu, a global equity derivatives strategist at JP Morgan, noted that the pace of purchases is significantly higher than the 12-month average. Market observers have been closely monitoring retail traders, as they tend to be the last to cut stock exposure, so the recent wave of buying by retail investors may indicate that the stock market has not yet hit bottom.
Wu pointed out that the recent behavior of retail investors is characteristic of a year of &#34;decline&#34; in the stock market. She noted that a similar situation occurred in 2022, a year when the U.S. benchmark index fell by 19%, marking the only down year in the past six years; &#34;This is a sign of their 'buying the dip' mentality.&#34; Wu estimates that retail investors have lost 7% so far this year, while the S&amp;P 500 index has dropped 3.7%.
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When the U.S. stock market began to experience significant sell-offs at the end of February, retail traders remained enthusiastic buyers, marking a clear divergence from institutional buyers, who withdrew from the U.S. stock market at a record pace. Trading data from Bank of America shows that over the past 14 weeks, its retail clients have been net buyers of U.S. stocks, while institutional clients became net buyers for the first time in three weeks, with hedge funds being net sellers for the fifth consecutive week.
Signals from retail investors seem to emphasize Wall Street's increasingly pessimistic outlook. Over the past two weeks, strategists from Goldman Sachs, Citigroup, and HSBC have all downgraded their expectations for the U.S. stock market. Michael Wilson, a well-known equity strategist at Morgan Stanley, stated in an interview on Thursday that the U.S. stock market will not reach new highs in the first half of this year.
There are signs that individual investor sentiment has weakened in recent weeks. A widely watched indicator from the American Association of Individual Investors shows that bullish sentiment has remained below the 20% threshold for three consecutive weeks, with only a slight increase in the week ending March 19.
For some, this trend is worth noting. Mark Hackett, chief market strategist at Nationwide, stated, &#34;This indicates that people's words and actions have become disconnected.&#34; He referred to the fact that despite extremely pessimistic market sentiment data, retail investors continue to pour money into the U.S. stock market

As the U.S. stock market is hit by concerns over trade turmoil and economic slowdown, retail investors are still doubling down, despite increasing losses. JP Morgan data shows that retail investors injected over $12 billion into the market in the week ending March 19, with a buying pace above the 12-month average. Analyst Emma Wu pointed out that the buying behavior of retail investors may indicate that the market has not yet bottomed out, contrasting sharply with the withdrawal of institutional investors. Despite a 7% loss this year, retail investors still exhibit a "buying on dips" mentality

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