Retail Investors Turn Net Sellers as S&P 500 Rally Continues

Retail investors were net sellers of US stocks last week, the first weekly net sale since November 2025. Individual buying fell roughly 70% from January peaks even as the S&P 500 moved higher.

Between March 27 and April 2, retail traders spent a net $275 million on put option premium, the largest five-day total in nearly a year. That elevated spending on downside protection occurred during the same period the market advanced.

The S&P 500 recorded a seven-session winning streak, gaining about 7.6%, its longest run since October 2025. The rally followed a US-Iran ceasefire announcement that coincided with lower oil prices and higher risk appetite among investors.

An analysis of historical episodes going back to January 2020 found retail net-selling weeks have been uncommon. Scott Rubner, head of equity and equity derivatives strategy at Citadel Securities, noted the rarity and called it “a contrarian signal.” The study showed the S&P 500 was higher about 82% of the time in the two months after similar retail-selling episodes, with an average gain near 4.1%.

A separate review of long winning runs in the S&P 500 identified nine prior instances since the 1950s with at least a 7.0% multi-session rise. In eight of those nine cases the index was higher one month later, with an average one-month return of about 4.4%. Over the following three months the index rose in seven of the nine cases, averaging near 10.2%. Analysts summarized, “History says market momentum is set to continue.”

Market internals also showed improvement. About 65% of stocks in the Invesco QQQ Trust traded above their 10-day moving averages, a rise of roughly 40 percentage points in five sessions. Seasonal data for global equities indicate the MSCI World Index has posted April gains about 75% of the time over the past 25 years, with an average April return near 2%.

Market participants noted the coexistence of reduced retail buying and higher defensive option bets with a broadening equity rally and historical seasonal support.