Retail investors dumped U.S. stocks on Thursday at a pace not seen since the start of the COVID-19 pandemic, breaking their typical habit of “buying the dips” on market down days. Everyday investors sold a net $265 million in individual U.S. stocks on Thursday, according to Vanda Research, the largest single-day wave of net selling since March 17, 2020, when retail investors withdrew $502 million from individual stocks. “This is what we would call a complete capitulation by retail investors,” Viraj Patel, global macro strategist at Vanda Research, said in emailed comments. U.S. stocks plunged on Thursday as AI and chip stocks sold off, erasing gains from Wednesday’s post-election rally. The tech-heavy Nasdaq Composite (^IXIC) fell 5.2%, putting the index on track to close in a correction. The retail sales mark something of a departure from the trend of individual investors in recent years to snap up stocks when markets fall. Vanda said there were “no signs of buying the dip” in individual stocks, although some investors continued to buy leveraged exchange-traded funds such as ProShares UltraPro QQQ (TQQQ) and Direxion Daily Semiconductor Bull 3X Shares (SOXL). Vanda added that net sales were up a third Thursday afternoon before “late session” retail buyers intervened. Patel added that the pullback echoed a broader “buyers’ strike” among institutional investors along with forced selling through systematic and leveraged investment strategies. Yahoo Finance Follow David Hollerith on X @DsHollers.
