In an extraordinary twist on Wall Street, retail investors made headlines by investing a record-breaking $4.7 billion into U.S. stocks on Thursday — the largest one-day buying spree in the past decade, according to JPMorgan.
This surge in buying came as the Dow Jones Industrial Average plummeted by 1,679 points, or about 4%, closing at 40,546. The S&P 500 also suffered its worst day since the COVID-19 crash of 2020, falling 4.8%.
The market chaos was triggered by President Donald Trump’s announcement of sweeping tariffs, including a 10% minimum “reciprocal tariff” on nearly all imports and even higher rates for specific countries. Fears of a global trade war ignited a sell-off across global indices, rattling investor confidence.
Despite the panic, retail traders seized the dip, with major inflows into stocks like Nvidia, Amazon, and broad-based S&P 500 ETFs. Notably, Tesla saw net outflows, as some retail investors offloaded their positions in the electric vehicle giant.
What’s interesting is that this aggressive buying behavior contrasts sharply with March 2020, when markets crashed during the pandemic and retail investors largely stayed on the sidelines.
However, the optimism hasn't yet paid off. JPMorgan reports that the average retail portfolio is down 12.9% year-to-date, underperforming the broader S&P 500’s 8.3% drop.
On the global front, China responded to the tariffs by announcing 34% duties on all U.S. imports and introduced export restrictions on rare earth elements, further escalating trade tensions and fueling market volatility.
As uncertainty looms, all eyes are on whether this bold retail buying spree was savvy or premature and if markets will stabilize or slip further into chaos.
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