Retail U.S. Stock Trading Hits Four-Year Low, JPMorgan Chase Forecasts Rebound in Q2

JPMorgan strategists' latest report points out that the share of retail investors' transactions in U.S. stocks is expected to rebound in the second quarter after hitting a low in the first quarter.

Nikolaos Panigirtzoglou and his team of analysts emphasize that although the retail investors' share of trading in U.S. equities fell to a four-year low of 17% in the first quarter, the momentum in the second quarter will closely match the trajectory of the same period in 2025. This resurgence of trading activity is expected to provide new upward momentum for the subsequent performance of U.S. stocks.

Early signs of the return of retail investors have begun to emerge in the options market, with small traders' calls option purchases rising sharply in April and May of 2026 after a period of sluggishness. This pattern of behavior aligns with the trend of the S&P 500 Index, with U.S. stocks showing similar characteristics of weakness in the first quarter and a strong rebound in the second quarter in both 2025 and 2026. Retail investors, who had previously driven up the broad market by participating heavily in stock trading in the second quarter of last year, are now expected to inject new catalysts into the overall market with the recovery of the current buying momentum.

Retain investors remain a key driving force for stock market growth even against a backdrop of recent slowing participation. Bloomberg data shows that retail investors still account for nearly 20% of overall trade in U.S. stocks and hold nearly 50% of the zero maturity options trading. JPMorgan team points out that compared to high-frequency individual stocks or option operations, the proportion of retail investors in the overall end investor fund flow is a more central factor in determining the future direction of U.S. stocks.