Retail inflows into U.S. stocks are set to hit a record in 2025, as individual investors become a major force behind a rally that is likely to extend into the next year on hopes of interest rate cuts, analysts said.
Reuters
The amount of cash retail investors poured into U.S. stocks so far in 2025 is up 53% from $197 billion a year earlier and 14% higher than the $270 billion hit at the height of the retail trading frenzy in 2021, according to J.P.Morgan analysts.
Retail trading, meanwhile, accounted for 20–25% of total activity this year, touching a record high of about 35% in April, according to separate trading data from J.P.Morgan.
Individual investors snapped up high-quality stocks at discounts during selloffs, most notably after U.S. President Donald Trump‘s “Liberation Day” tariffs triggered a global meltdown in April, helping push the S&P 500 to fresh records. The benchmark index is up about 16% this year.
“Retail investors are here to stay, especially for 2026. They made money this year, they like to trade stocks, they have the applications to do so. We will continue to see them being a good presence,” said Steven DeSanctis, small- and mid-cap strategist at Jefferies.
Retail participation in the stock market has grown steadily over the years as the rise of low-cost, no-commission brokerages such as Robinhood and Interactive Brokers has made it easier and cheaper for average Americans to access the market.
The trend got wider notice in 2021 as many Americans who were homebound during the Covid-19 pandemic and were flush with cash used mobile trading platforms to bet on everything from GameStop to Big Tech.
AI plays such as Nvidia and Palantir Technologies were top favorites this year, according to retail brokerage data and executives, with the latter more than doubling in value as small-time traders bought the dip when institutional investors stepped back on valuation concerns, opens new tab.
Tesla shares, another top retail favorite, touched a record high on December 17, their first since the end of 2024.
