By Gordon Gottsegen
Retail investors’ dip-buying remains as strong as ever despite tariffs, Middle East tensions and economic uncertainty
Tariffs, market volatility and war in the Middle East couldn’t slow down the buying spree by individual investors, as they traded a record amount of stocks in the first half of the year.
Retail investors cumulatively bought around $3.4 trillion worth of equities over the first half of 2025, according to data from Nasdaq. At the same time, they sold about $3.2 trillion worth – bringing the total traded to over $6.6 trillion.
This represents a strong bias toward buying into the market versus taking money out, despite high levels of market volatility in the first half of the year. Tariff announcements from President Donald Trump spooked markets, while investors weighed the possibility of global trade wars leading to an economic slowdown and higher inflation. The Dow Jones Industrial Average DJIA and S&P 500 SPX entered a correction, while the Nasdaq Composite COMP fell into bear-market territory. Some investors said it was “the toughest investment climate” they ever experienced.
Yet retail investors’ behavior showed that they were bullish in the face of all of this. Cumulative net retail inflows hit $137.6 billion into U.S. single stocks and exchange-traded funds the first half of the 2025, according to Nasdaq.
Data from capital-markets research firm Vanda Research differed slightly from the Nasdaq data, but it showed the same general trend. Vanda found that investors net purchased $155.3 billion worth of single stocks and ETFs in the first half of 2025. This was the largest-ever net inflow of retail investor cash since Vanda started keeping track in 2014. Inflows surpassed the previous high of $152.8 billion reached in the first half of 2021, when the meme-stock mania and pandemic stimulus checks drove hordes of everyday investors into the stock market.
In 2025, buying was driven by two things, Vanda said: the “American exceptionalism” trade and a record amount of dip-buying in response to Trump’s “liberation day” tariffs. Buzzy U.S. stocks – like Nvidia (NVDA), Tesla (TSLA) and Palantir (PLTR) – topped the charts of the most actively traded tickers throughout the first half, but retail investors also poured significant amounts of capital into index-tracking ETFs like SPDR S&P 500 ETF Trust SPY and Invesco QQQ Trust Series I QQQ.
Read more: Fourth of July holiday highlights 4 reasons ‘American exceptionalism’ isn’t going anywhere
The average daily inflow was roughly $1.3 billion, according to Vanda, which represents a 21.6% jump from the average in 2024.
This level of stock-buying hasn’t exactly hurt investors’ performance either. Vanda estimated that the average retail portfolio was up 6.2% so far in 2025, which was closely in line with the 6.1% that the S&P 500 gained in the first half of this year.
“Retail investors remain a major force in the market. Participation is at record highs, the dip-buying bias is fully intact, and engagement with single names – particularly high-beta and leveraged plays – continues to rise. Performance is holding up, and risk appetite is anything but shy. Nothing seems to stop this retail train,” Marco Iachini, Vanda Research’s senior vice president of research, wrote in a note.
-Gordon Gottsegen
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07-05-25 0800ET
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