Retail investors have been active buyers amid the recent volatility in U.S. stock markets, especially during a significant drop in tech shares, though they’ve also shown some caution.
Despite a massive global selloff on Monday—driven by concerns over economic data, earnings reports, and the unwinding of yen-funded trades—many individual investors continued purchasing shares even as major indexes fell between 2.6% and 3.4%.
According to Vanda Research, which tracks market activity, individual investors remained net buyers of stocks from companies like Nvidia, Intel, and Advanced Micro Devices. They also increased their purchases of an exchange-traded fund (ETF) that tracks 20-year Treasury bonds.
“There was no mass selloff from retail investors,” said Marco Iachini, senior vice president of research at Vanda. He emphasized that their data reflects the actions of self-directed investors—those managing their own trades without a large brokerage or financial advisor.
Iachini noted that retail investors have continued their pattern of buying on dips. For example, Robinhood Markets saw $1 billion in new cash from retail clients in the first week of August. Of this, $500 million was deposited during the Monday selloff alone, a sharp increase compared to the second-quarter daily average of under $350 million.
However, there were issues with trade execution during overnight sessions, as Blue Ocean ATS, which handles these trades, struggled to manage the high demand, according to Robinhood’s founder, Vladimir Tenev.
On the other hand, a report from JP Morgan suggested that retail investors were “aggressive net sellers” on Monday, with significant selling pressure occurring in the first hour of trading. JP Morgan did not provide further comment on the matter.
Both Vanda and JP Morgan observed that retail investors were actively buying again during the market rebound on Tuesday and Wednesday. Vanda noted a notable surge in interest in the iShares 20+ Year Treasury Bond ETF during this recovery period, making it the second-most-purchased security after Nvidia shares by Thursday morning. This could suggest that some retail investors are seeking safer investments amid market uncertainties.
Additionally, Alight Solutions, which monitors trading in around 2 million 401(k) accounts, reported that investors have been moving assets from stock funds to money markets and fixed-income products. Rob Austin from Alight noted that while the trading activity was significantly higher than average, it still represented a small fraction—0.1%—of the $200 billion in assets tracked by the firm.