Retail Investors Sold US Stocks for the First Time Since November

Retail investors became net sellers of stocks last week, making a bearish shift in positioning since late November 2025.

The selling came amid a notable rally in US equities, with the S&P 500 rebounding to recover nearly all of its war-driven losses.

Retail Capitulation Meets Renewed Rally

Mom-and-pop investor participation has slowed sharply. Global Markets Investor reported that retail stock purchases have declined approximately 70% from January highs.

“Retail investors turned bearish at the worst possible time: Retail SOLD stocks last week for the first time since November 2025,” Global Markets Investor wrote.

Between March 27 and April 2, retail traders also spent a record $275 million in net put options premium, the largest five-day total in nearly a year. 

The defensive positioning stands in direct contrast to the index’s sharp recovery, fueled by the US-Iran ceasefire announcement that sent oil prices lower and reignited risk appetite.

Scott Rubner, head of equity and equity derivatives strategy at Citadel Securities, noted that retail net selling has occurred just 18 times since January 2020. That rarity carries a contrarian signal.

Following similar episodes, the S&P 500 has risen approximately 82% of the time within the subsequent two months, delivering an average gain of 4.1%.

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History Favors A Stock Market Rally

Meanwhile, the Kobeissi Letter noted that the S&P 500 posted seven consecutive green sessions, gaining roughly 7.6%, its longest winning streak since October 2025.

The analysts explained that since the 1950s, the S&P 500 has recorded a similar winning run with at least a 7.0% gain only nine other times.

In eight of those nine instances, the index was higher one month later, with an average return of +4.4%. Over the following three months, it gained in seven cases, with an average return of +10.2%.

“History says market momentum is set to continue,” the post read.

Breadth has also improved. Roughly 65% of stocks in the Invesco QQQ Trust (QQQ) now trade above their 10-day moving averages, a 40-point jump in just five sessions.

Seasonal patterns add another tailwind. April has historically been one of the strongest months for equities. The MSCI World Index has posted gains roughly 75% of the time, with an average return of about 2% over the past 25 years.

Taken together, the divergence between cautious retail positioning and strengthening market internals suggests the current rally may still have room to run.

If historical patterns hold, retail capitulation could once again act as a contrarian signal, supporting further upside in equities over the near term.

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