Retail traders relied on 2025 strategies to buy the dip this week as market volatility soared. Stocks suffered their worst day since October on Tuesday after President Trump threatened to take over Greenland and announced tariffs on eight European countries that objected. However, markets rebounded on Wednesday after President Trump announced a “framework” for an agreement with NATO that centered on U.S. strategic interests in Danish territory. Big bucks headed into the “Sell America” trade on Tuesday, with U.S. stocks and the dollar falling while bond yields and gold rose. Meanwhile, individual traders supported the stock market by continuing to buy despite the decline. Data shows this same strategy fueled a relentless rally in 2025. “Geopolitical developments introduced new uncertainty into market sentiment this Tuesday, and retail investors responded by aggressively buying the momentum,” Arun Jain, head of U.S. equities quantitative strategy at JPMorgan, said in a letter to clients on Thursday. .SPX 5D Mountain Tuesday’s five-day S&P 500 index was the third-biggest single-day buy of the year among retail traders, according to JPMorgan. Dollar inflows into stocks from retail investors reached $12.9 billion this week, nearly double the weekly average over the past 12 months and close to the level of buying seen after President Trump announced tariff increases last April, the bank’s research found. Jain added that purchasing momentum continued into the new year, with retail activity setting new records on a monthly basis. Metals and Overseas To be sure, the mother-son investors were not completely ignoring transatlantic tensions and divisions within NATO. Jain said there has been an increased focus on both precious metals funds and international equities following President Trump’s recent tariff threats. Market data firm VandaTrak similarly reported a spike in unusually high buying levels by Main Street investors on Tuesday, which Vanda’s Ashwin Bakre said suggests retail investors remain “in conditions to buy on the weak.” He said this action could indicate that small investors are “substantially pre-empting the potential price floor,” meaning they are buying in anticipation of a rebound. Some market participants saw this week’s move as another example of a “TACO” trade, short for “Trump Always Chickens Out,” which suggests that when White House policies unsettle markets, individuals buy stocks based on the assumption that the most aggressive policies will later be reversed. “The risk rebound in Greenland appears to prove that investors are not pushing the US sell trade even harder in anticipation of a reversal from President Trump,” Krishna Guha, head of global policy and central bank strategy at Evercore ISI, said in a note to clients on Wednesday. Retail investors are poised for a great year in 2025, helped by a move to buy stocks during a market downturn in January. Most notably, small investors bought a record amount of stocks shortly after President Trump announced hefty tariffs last April. This plan was later watered down. Daily traders started 2026 with a focus on energy stocks and energy exchange-traded funds in the wake of the US attack on Venezuela, and silver continues to soar. But JPMorgan and Banda said recent attention has partially returned to last year’s leaders: popular technology stocks such as Nvidia and Intel.
