Retail traders made their biggest buys of US stocks in a decade during the S&P 500’s worst day since 2020

The US stock market’s worst day since June 2020 was, in the eyes of retail traders, the biggest buying opportunity in at least 10 years.

“Despite a sea of red, retail investors stood firm and not only bought the dip but did so at a historic pace,” wrote JPMorgan analysts led by Emma Wu. “They ended today [Thursday] with +$4.7 billion of net buying, the largest level over the past decade.”

When it comes to what they’re buying, the retail crowd is largely continuing to dance with the ones that brought them.

“Their preference for the Mag 7 continued though Tesla was the only company sold of the set,” they added.

Nvidia and Amazon were the most preferred picks, with more than $400 million in net buys, respectively.

The analysts observed that this type of behavior is very different to how retail reacted to the Covid-induced shock. Not only was retail more willing to buy this time, but they were willing to express conviction in single stocks:

“Although the market has undergone its worst 1D performance in five years, the response by Retail investors stood in stark contrast to the 2020 COVID sell-off. At that time, they largely exacerbated the existing institutional selling, with ~75% correlation between market performance and their subsequent flows. Even on days they did decide to step in, they did not have the confidence to pick stocks but instead opted for more diversified ETF exposure, leading to a high ETF-to-singles ratio.”