As U.S. stocks staged a chart-busting rally on Wednesday after President Donald Trump’s about-face in his trade policy, one group of investors had an especially sweet victory.
Retail traders — who kept buying shares even when benchmark indexes tumbled and institutional investors fled — notched a 17% gain on Wednesday. That helped them nearly break even for the year, according to data from Emma Wu, JPMorgan Chase & Co.’s global quantitative and derivatives strategist. The S&P 500 Index fell 7.2% in the same period.
“We saw a strong preponderance of buying activity among our most active names, even during the worst of the selloff,” said Steve Sosnick, chief strategist at Interactive Brokers. “Active, small investors remained committed to buying the dips in their favorite names, generally large technology stocks, and that zeal was rewarded in the market melt-up.”
Individual traders kept buying U.S. stocks even with trade tensions escalating, economists warning of a possible recession and concerns emerging that the euphoria around artificial intelligence may have gone too far. While Trump’s latest set of tariffs sent the S&P 500 down 12% in four days, the group spent $11 billion net in cash equities in the week ended on Wednesday, significantly above the average over the past year, JPMorgan’s Wu said.
“Their relentless confidence through this turmoil has paid off,” she said.
Retail investors — who rose to prominence during the COVID-19 pandemic for using social media to swap trading advice — are also among the most likely to take cues from Trump’s posts on Truth Social and X.
Hours before announcing the pause in tariffs, Trump urged investors on social media to “BE COOL,” saying “THIS IS A GREAT TIME TO BUY” and predicting “everything is going to work out well.”
At online brokerage platform Moomoo, retail investors’ cash level increased by 15% recently, as they accumulated buying power to take advantage of the market weakness, according to Neil McDonald, the company’s U.S. chief executive officer.
The most actively traded names over the past two weeks were their perennial favorites: Tesla Inc., Nvidia Corp. and Alibaba Group Holding Ltd. They also piled into leveraged exchange-traded funds, including the Direxion Daily TSLA Bull 2x Shares and ProShares UltraPro QQQ, which aims to return three times the daily performance of the Nasdaq 100 Index.
“They have been consistently buying the dips and did not capitalize in the recent turmoil, unlike mutual funds and hedge funds,” McDonald said.
--With assistance from Yiqin Shen.
©2025 Bloomberg L.P.
