FOMO Spirit is Back! Retail Investors Pour $70 Billion Into Dip-Buying as Big Funds Flee the Tumble
1min read The market correction has ignited FOMO's spirit. Retail investors have injected nearly $70 billion into US stocks this year, even as big funds cut their exposure over concerns about President Trump's trade war.
Retail investors have continued their aggressive buying, with net inflows of $67 billion into equities and ETFs in 2025, only slightly below the $71 billion from the final quarter of 2024, according to VandaTrack. Their resilience stands in contrast to Wall Street's turbulence, fueled by Trump's erratic tariff plans and the rise of Chinese AI start-up DeepSeek.
"Dip-buying has been an essentially foolproof strategy for four of the past five years," said Steve Sosnick, chief market strategist at Interactive Brokers. "Doing something that works remarkably well for so long means you're conditioned to stick with it."
Ask Aime: Why are retail investors buying US stocks despite the market correction and trade war concerns?
This sentiment was echoed on Reddit's Wall Street Bets, where a user declared: "Respect the dip, be the dip, BUY THE DIP!"
Still, the S&P 500 has declined 2% this year, while the Nasdaq 100 has dropped nearly 4%. Stocks finally ended four consecutive weeks of losses last week, with the S&P 500 bouncing 1.7% on Monday as Trump signaled he may scale back parts of his broad tariff plan, reinforcing the belief that buying the dip remains a winning strategy.
Institutional investors, however, have taken a more cautious approach. Bank of America data shows that big investors slashed their US equity exposure in March, marking their largest-ever reduction.
Retail investors have also continued piling into high-profile stocks that have suffered steep losses in 2025. Tesla and Nvidia, both market darlings in previous years, saw billions in retail inflows last week. Demand for leveraged ETFs tracking these stocks remains strong, with Sosnick noting that retail investors' enthusiasm for these instruments "makes some sense" given recent profits from buying dips.
Still, some on Wall Street view this unshaken retail optimism as a warning sign. Bernstein analyst Aleksander Peterc recalled the late-1990s tech bubble: "Back in 1999, when my housekeeper started asking which stocks to invest in, that was exactly when things started to fall apart."
