Retail investors used Wednesday’s big market rebound as an opportunity to cut risk rather than chase gains, raising questions about the durability of a rally that was tied to optimism over President Donald Trump’s Iran ceasefire. Individual investors were heavy net sellers of exchange-traded funds during the morning rally Wednesday, with intraday ETF outflows hitting their largest levels in a year, including cuts to broad-market exposure, a sharp break from mom-and-pop investors’ usual dip-buying behavior, according to fund flows tracked by JPMorgan. By 1 p.m., positioning briefly stabilized as investors pared back selling and selectively bought individual stocks, but by the close they had reduced ETF holdings to the weakest level in more than 10 months, while single-stock flows remained negative across the board, the data showed. TheDow Jones Industrial Average ripped more than 1,300 points higher Wednesday, up 2.9%, after Trumpsuspended attacks on Iran for two weeks, the benchmark’s best day sinceApril 2025. TheS & P 500popped 2.5% and theNasdaq Compositesurged 2.8%. “Today’s relief rally brings confirmation that the shift in retail behavior that we have observed over the past month is persisting: retail moved from ‘buying the dip’ (e.g. this time last year), to now skipping the dips, selling into rallies, and positioning more defensively,” JPMorgan said in a note to clients. For much of the Trump era, retail traders have been an unusually influential force in equity markets, often aggressively stepping in during selloffs and helping fuel sharp rebounds. That dynamic now appears to be fading, with retail investors increasingly hesitant to add exposure, even during improving market conditions. Within single stocks, retail flows were negative across nearly all sectors Wednesday, JPMorgan said. Energy and industrial names led the selling, with heavy outflows from Exxon Mobil , Chevron and Occidental Petroleum . One of the few areas of relative resilience was megacap technology, the firm’s data showed. Retail investors were modest net buyers of stocks such as Tesla , Nvidia , Microsoft and Meta Platforms .
