US retail equity investors bounce from heavy selling to buying in April

Retail investors bounced from heavy US equity selling to gradually buying stocks in April, likely reflecting a mixed and uncertain reaction to the Trump administration's tariffs announced early in the month.

In the first week of April, as President Donald Trump announced higher tariffs on nearly all global trading partners, retail investors sold off more than a net $7.48 billion, and then bought a net $7.32 billion over the following three weeks as they tried to time the market's bottom, according to the latest S&P Global Market Intelligence data.

The initial selling, followed by three weeks of buying, tracked the broad movement of the market during April. After Trump's tariffs announcement on April 2, the S&P 500 fell by more than 12.1% over the next four trading days to its lowest level in nearly a year. From April 8 to the end of the month, the large-cap index then rallied about 11.8% as retail investors returned to buying.

"The retail selling appears to be more of a panic sell, with the group broadly and swiftly exiting the market as equities retreated, likely looking to mitigate losses," said Matthew Albert, a principal associate for issuer solutions at S&P Global Market Intelligence. "Retail then reversed course, likely due to [fear of missing out], as the market rebounded substantially."

Retail investors have sold off nearly $168.2 billion in stocks from the end of April 2024 to the end of April 2025. The S&P 500 is up about 10.6% over that stretch.

Institutional investors continued to sell, and index and exchange-traded funds (ETFs) continued to buy in April, the latest data shows.

Institutions sold a net $30.93 billion in stocks in April, more than the $18.88 billion sold in March but below the $38.50 billion monthly selling average over the past year. Index and ETFs, meanwhile, bought nearly $14.46 billion in April, up from the $5.05 billion bought in March, but below the $28.51 billion bought on average each month over the past year.

– Read a special report on US equity capital flows in the days surrounding President Trump's April 2 tariff announcement: Institutional, retail investors shed $27B in US stocks in early April sell-off – For more information on capital flows data from Issuer Solutions, contact Thomas McNamara at thomas.mcnamara@spglobal.com.

This trend of institutions selling and index and ETF investors buying is likely to continue in the equities markets for the foreseeable future, even as policy uncertainty persists, Albert said.

"Despite the market recovering fairly well from the April lows, investors don't really have a clear picture of how US policy implementation will play out in the coming months," Albert said. "That will likely continue driving capital into generalized investment vehicles as investors look to mitigate symbol-specific risk."

This trend could be disrupted by a prolonged market rout, Albert said, as ETF redemption pressure would likely increase as investors move to cash or alternative investments. In addition, market participants may gain confidence about the health of the global economy later this year, potentially triggering an unwinding of some capital in ETFs, and they seek stock-specific investment strategies, Albert said.