Retail traders tiptoe back into U.S. stocks after 3-month hiatus

Retail trading in U.S. stocks is starting to pick up again after months of slowdown, data showed, as the hype around artificial intelligence (AI) and a tamer interest-rate outlook prove hard to resist.

U.S. inflows from individual traders hit their highest in three months last week, averaging at $1.36 billion per day, Vanda Research said in a note on Thursday.

After buying U.S. stocks at a record pace in the first quarter of 2023, retail investors had retreated to the sidelines amid turmoil in the banking sector, high interest rates and fears of a recession.

But the passage of a U.S. debt ceiling deal last week helped stave off a devastating default and empowered markets to break out of a range and move higher.

“Following the debt ceiling agreement, risk-on sentiment seemed to have returned to the retail investor base this past week as we witnessed bullish flows across the ETF, single stock, and options space, mainly benefiting technology names,” J.P. Morgan analyst Peng Cheng said.

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