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U.S. Retail Investors' Share of S&P 500 Trading Volume Dips Below 5-Year Average as Institutions Hold Firm Amid Surging Yields
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According to a report from Sina Finance citing Vanda Research and Goldman Sachs, US retail stock traders appear to be shifting to a wait-and-see approach after years of aggressive buying. Vanda Research data shows that institutional investors are displaying remarkable resilience amid rising US Treasury yields, with their options flows roughly three times the typical September level. Vanda global market strategist Viraj Patel noted that large money inflows have rebounded over the past five trading days despite 10-year and 30-year Treasury yields hitting multi-year highs, calling it a 'reasonably constructive signal' of institutional risk appetite. Patel highlighted that institutional traders are selectively buying AI-related stocks, with Meta Platforms being the top pick last week, surging nearly 13% after its Muse Charm device debut. Meanwhile, Goldman Sachs found that retail investors' share of S&P 500 trading volume has declined from its peak nearly a year ago and is now more than three percentage points below the five-year average. Despite pressure from rising bond yields, the S&P 500 rose over 1% last week, turning positive for the month.
Source report
After years of aggressive buying, retail traders appear to be stepping to the sidelines. Meanwhile, data from Vanda Research shows that large investors are holding firm in stocks despite surging U.S. Treasury yields.
"Institutional investors have shown remarkable resilience amid this week's macro volatility," Viraj Patel, global market strategist at Vanda, wrote in a note to clients on Friday.
According to the data, institutional options flows are roughly three times the typical September level.
Patel noted that over the past five trading days, large capital inflows have rebounded, even as 10-year and 30-year U.S. Treasury yields climbed to their highest levels in more than a decade. He described this as a "reasonably constructive signal" of institutional risk appetite hidden within the broader de-risking narrative.
Patel said institutional traders are selectively buying into artificial intelligence names amid the volatility.
He specifically highlighted Meta Platforms as last week's top pick. Shares of the Facebook parent surged nearly 13% in the week following the debut of its Muse Charm device. Momentum has been building since Meta launched its Muse personal AI agent earlier this month.
"Macro uncertainty hasn't stopped risk-taking," Patel said. Instead, "it's making investors more selective."
Retail Traders Lose Volume Share
Retail traders had a strong showing in 2025, leading some to declare they had shed the "dumb money" label. Their performance was partly attributed to buying the dip during market declines following Trump's tariff announcements.
However, Goldman Sachs reports that retail investors' share of S&P 500 trading volume has been trending downward from its peak nearly a year ago. The bank found that the current share is more than three percentage points below the five-year average.
Despite pressure from rising Treasury yields, the S&P 500 still closed last week up more than 1%. That rally has pushed the benchmark index into positive territory for the month.
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Institutional investors pour $18.4B into US options, shift to AI stocks as retail share shrinks