MW The retail buy-the-dip move paid off. What that crowd of investors is doing now, according to JPMorgan.

By Barbara Kollmeyer

Retail investors are changing their strategy, says JPMorgan.

A pullback is shaping up, as investors hunt fresh rationale to keep buying and excitement fades over the U.S.-China tariff pause. Retail will be in focus with data and Walmart earnings ahead.

Timing stock market ups-and-downs is a tricky feat, but congratulations are in order for retail investors, who appear to have done well in recent weeks by tearing a page out of Warren Buffett's "be-greedy-when-others-are-fearful" playbook.

"The buy-the-dip strategy in early April has clearly paid off," said a team of JPMorgan strategists led by Emma Wu. "We estimate retail investors' portfolio is up 15.1% since April 8, closely aligning with the market performance of +15.8%."

Investors bought $50 billion in stocks as the market bounced from the S&P 500's SPX 52-week low of 4982.77 reached April 8, said the JPMorgan team.

"Notably, their buy-the-dip strategy and gradual buying during the subsequent rally (with a reduced pace) has historically been profitable," said the strategists. That was the situation in 2020: retail buyers made some 31% from the March low to the June high, basically doubling the market performance, the JPMorgan said.

Retail investors were the main driver behind the market rally in the last week of April, with institutional activity subdued and low positioning by momentum-trading commodity trading advisers. Their market share reached 36% in late April, versus a year-to-date average of 21% and long-term share of 12%.

As for what that savvy bunch of traders has been up to lately, JPMorgan says a shift may be under way.

Wu and her colleagues noted that Monday marked the first time they've seen profit-taking flow - $555 million - since the market recovery, with $2 billion profits taken on options and the "largest outflow in history" for Nvidia $(NVDA)$, to the tune of $894 million.

After Tuesday's softer-than-forecast inflation numbers, retail investors came back in, though at a slower pace.

Inflows in the latest week were entirely driven by exchange-traded funds, chiefly broad market ones such as the SPDR S&P 500 ETF Trust SPY, said Wu and colleagues. They also saw a sector rotation: value to growth, small cap to large cap, healthcare to industrials, gold and silver to base metals, while demand for international equities remained a theme.

Over the past week, investors took profits on Nvidia, Palantir $(PLTR)$ and Tesla $(TSLA)$, with continued heavily selling of Apple $(AAPL)$ since last July, though buying for other Magnificent 7 group names.

The markets

U.S. stock futures (ES00) (YM00) (NQ00) are in the red, as Treasury yields BX:TMUBMUSD30Y BX:TMUBMUSD10Y push lower. Oil prices (CL00) (NQ00) are down nearly 4% on rising bets of a U.S.-Iran nuclear deal.

   Key asset performance                                                Last       5d      1m      YTD      1y 
   S&P 500                                                              5892.58    4.64%   11.69%  0.19%    11.01% 
   Nasdaq Composite                                                     19,146.81  7.94%   17.41%  -0.85%   14.36% 
   10-year Treasury                                                     4.536      15.50   20.60   -4.00    15.50 
   Gold                                                                 3131.9     -7.14%  -6.72%  18.66%   30.94% 
   Oil                                                                  61.5       6.13%   -0.71%  -14.43%  -22.02% 
   Data: MarketWatch. Treasury yields change expressed in basis points 

The buzz

Earnings from consumer bellwether Walmart $(WMT)$ are coming up.

Elsewhere, China e-commerce group Alibaba $(BABA)$ reported weaker-than-forecast results and shares are down.

April retail sales, due at 8:30 a.m., are expected to show a gain of just 0.1%. Weekly jobless claims, producer prices, New York and Philly Fed manufacturing surveys are coming at the same time. Industrial production is scheduled for 9:15 a.m., followed by business inventories and a home builders confidence index at 10 a.m.

Fed Chairman Jerome Powell will speak on the central bank's monetary policy approach at 8:40 a.m.

UnitedHealth shares $(UNH)$ are off 6% after The Wall Street Journal reported a Justice Department probe over possible criminal Medicare fraud.

Foot Locker $(FL)$ is up 70% as Dick's Sporting Goods $(DKS)$ reportedly nears a deal to buy the sneaker chain.

Cisco Systems $(CSCO)$ posted an earnings beat on growing AI demand for networking products.

CoreWeave $(CRWV)$ is falling on disappointing guidance.

President Donald Trump told a news conference that he doesn't favor the U.S. creating a sovereign-wealth fund, saying it would be better to pay off debt. He also said India offered to drop tariffs on the U.S. to zero.

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The chart

Gold could be setting up for a "spectacular fall," as the U.S.-China tariff pause and talks planned between Russia and Ukraine take war risk out of commodity prices, said Ben Emons, founder of Fed Watch Advisors, in a Substack post. His chart shows gold and the Energy Select Sector SPDR XLE both pointing lower. "Gold has 'crashed' before, such as in 2012-13 when the Euro crisis ended, and after 2020, resulting in a drawdown of 30 to 40 percent in each case. Secondly, there is energy, with XLE and WTI stopping short of the 50-day moving average, while the broader market remains in a risk-on momentum," he said.

Top tickers

These were the most active tickers on MarketWatch as of 6 a.m.:

   Ticker  Security name 
   NVDA    Nvidia 
   TSLA    Tesla 
   UNH     UnitedHealth 
   GME     GameStop 
   PLTR    Palantir Technologies 
   SMCI    Super Micro Computer 
   AAPL    Apple 
   AMD     Advanced Micro Devices 
   AMZN    Amazon.com 
   TSM     Taiwan Semiconductor Manufacturing 

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May 15, 2025 06:53 ET (10:53 GMT)

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