Goldman Sachs listed 25 stocks that are an important force for retail investors to support the US stock market!

The main characters in the US stock market are gradually changing. Once dominated by institutional investors, now retail investors are becoming an important force supporting the US stock market with a "buy the dip" mentality. A recent report released by Goldman Sachs explicitly points out that the recent rise in the S&P 500 index and Nasdaq is due in no small part to retail buying pressure. Especially with the frenzy of meme stocks, this trend is not limited to small-cap stocks but is gradually spreading to large-cap tech stocks and core weight stocks, driving the market higher. Goldman Sachs derivatives expert John Marshall wrote in his research that retail buying in recent times has extended from niche theme stocks such as cryptocurrencies, artificial intelligence, retail, and quantum computing to well-known targets such as Palantir, AMD, and TransDigm. He bluntly stated that if this trend continues, these stocks with high retail participation may experience asymmetric upside in the coming weeks. In other words, they may see significant increases after a minor pullback. It is worth noting that Goldman Sachs also mentioned the bullish options on these 25 stocks, suggesting that the next "gamma squeeze" could propel them to new highs. At the same time, professional funds are also not absent. Driven by the fear of missing out (FOMO), institutional investors have increased their positions through futures, swaps, and options. The moderate rise in funding spreads and the increasing expectations of a rate cut by the Federal Reserve in September have become important reasons for them to increase their positions. The view of Goldman Sachs strategists is clear: the US stock market still has room for further upside in the current environment. According to StockWe.com, a big data platform for the US stock market, retail investor power has been seen by Goldman Sachs as an essential market variable. Top traders Gail Hafif, Lee Coppersmith, and Brian Garrett pointed out in a report that in the past year, retail trading volume accounted for over 28% of the total trading volume of the S&P 500 index. This not only changed the market structure but also redefined trading rules. Interestingly, Goldman's speculative trading index's latest reading has risen to 114, indicating that the speculative sentiment dominated by retail investors continues to strengthen. In terms of sector distribution, retail preferences are clear. Non-essential consumer goods and technology stocks are their top choices, while the real estate and utility sectors are less popular. For example, with XLK (Technology Select Sector SPDR ETF), almost one-fifth of the trading volume now comes from retail investors, which is far higher than historical levels. In other words, behind the high-level performance of US tech stocks, retail investors are the key behind-the-scenes drivers. So, where will this trend go? From a macro environment perspective, if the Federal Reserve truly begins a rate cut in the second half of the year, the resonance between retail and institutional investors may further intensify the upward momentum of the US stock market. However, risks should not be overlooked. With the speculative index climbing, market volatility also increases. For retail investors, short-term trading opportunities are indeed tempting, but chasing the market excessively is susceptible to being backlashed by market sentiment. From an investment strategy perspective, the current US stock market is in a typical phase of resonance between retail and institutional investors. For retail investors, focusing on high trading volume, high market capitalization, and high concentration of retail buying targets - such as Palantir, AMD, etc., may capture the opportunity for the next gamma squeeze. However, maintaining sufficient respect for risks and using hedging tools to control positions reasonably, especially in an environment of rapidly rising volatility, is key to standing invulnerable. This article is from the official WeChat account of "American Stock Investment Network," edited by GMTEight: Wang Qiujia.