By Hannah Erin Lang

The bad vibes among individual investors are getting worse.

Bearishness, or an expectation that stock prices will fall over the next six months, jumped to about 61% in the latest weekly survey by the American Association of Individual Investors, up from 40.5% the week prior. This week's reading is the highest since September 2022, and among the most elevated on record.

Sentiment measures have darkened in recent weeks as investors weigh a long list of risks: possible tariffs, sweeping federal job cuts and rekindled recession fears among them. Confidence among American consumers turned sharply lower in February, with the Conference Board's measure logging its largest monthly decline in more than three years.

Economic uncertainty seems to be driving some of the pessimism. When asked how they would describe the state of the U.S. economy, 54.5% of respondents to this week's AAII survey said they would describe it as "mixed." Only about 39% said they would describe it as "good" or "great."

In recent surveys, individual investors have expressed concerns that stock valuations are too high and that President Trump's tariff policies could slow growth and raise prices.

Rising pessimism isn't always a bad sign. Some investors use the AAII measure as a contrarian indicator, selling when bullish sentiment jumps and buying when bearishness rises.

This item is part of a Wall Street Journal live coverage event. The full stream can be found by searching P/WSJL (WSJ Live Coverage).

(END) Dow Jones Newswires

February 27, 2025 16:19 ET (21:19 GMT)

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