Sharp Decline in Investor Sentiment
Investor sentiment among individual investors has sharply declined as technology stocks led a downturn in the U.S. stock market last week. According to the American Association of Individual Investors (AAII) on the 27th (local time), the share of bearish investors—those expecting the stock market to fall over the next six months—jumped from 40.5% to 60.6% in just a week.
This is the highest level of bearish sentiment since September 2022, when the U.S. stock market saw a significant plunge. During that period, the S&P 500 index fell about 25% from January to October 2022.
Decline in Bullish Investors
Conversely, the percentage of bullish investors—those expecting a market rise—dropped from 29.2% to 19.4%, significantly below the historical average of 37.5%.
As the Nasdaq Composite Index continues its decline, falling nearly 4% this year, it appears that investor sentiment among individual investors, who played a major role in last year’s market surge, has turned more negative.
Factors Behind Market Underperformance
The U.S. stock market is currently underperforming compared to other major global markets due to several internal and external factors. Among them, President Donald Trump’s tariff policy, weakening expectations for a Federal Reserve rate cut, and the poor performance of major technology stocks have weighed heavily on investor confidence.
So far this year, the S&P 500 and Nasdaq Composite have dropped by 0.34% and 3.97%, respectively, while the Dow Jones Industrial Average has managed to rise by 1.63%. In contrast, South Korea’s KOSPI has surged by 10%, and European stock markets have gained more than 11%.
Conclusion
Investor sentiment in the U.S. has turned notably bearish amid uncertainties surrounding trade policies and Federal Reserve decisions. The underperformance of key technology stocks has added to market pressures, making the outlook for the U.S. stock market more uncertain compared to its global counterparts. Moving forward, market trends will likely depend on economic data, central bank policies, and geopolitical developments.
