No fear of heights? JP Morgan predicts that the army of individual investors will soon return, adding new momentum to the US stock market.

As the U.S. stock market continues to hit new highs, JPMorgan Chase's strategists predict that the proportion of retail trading, which fell to a four-year low at the end of the first quarter, is expected to rebound and could bring new momentum to the stock market. The team of JPMorgan Chase strategists led by Nikolaos Panigirtzoglou wrote in a report, "Although the share of retail investors in U.S. stock trading fell further to 17% in the first quarter, we expect a rebound in the second quarter, similar to the situation in the second quarter of 2025. This is consistent with the trend we have observed in the options market, where the number of small options traders buying call options decreased from October 2025 to March 2026, but sharply increased in April/May 2026." The S&P 500 index's performance in 2025 and 2026 was very similar, with low returns in the first quarter followed by a strong rebound in the second quarter. The rest of 2025 ultimately brought handsome returns to U.S. investors. The potential recovery of retail trading could provide new momentum to the overall market. JPMorgan Chase's strategists pointed out that retail investors actively participated in individual stock trading in the second quarter of 2025, driving the stock market higher. However, after that, except for October 2025, retail investors slowed down their pace of individual stock trading. The team stated that retail investors remain an important driving force for the rise of the U.S. stock market. "Despite a decline in the second half of 2025/first quarter of 2026, they still account for nearly 20% of U.S. stock trading volume and nearly 50% of zero-day expiry options trading volume." However, during this period of overall decline in retail participation, another group of traditional retail investors who are more inclined to invest in stock funds have provided strong support to the market. The team added that for the stock market, it is not the frequency of retail trading in stocks and options that is crucial, but rather the proportion it occupies in the overall flow of funds from end investors. In recent years, the rise of low-cost, zero-commission brokers such as Robinhood and Interactive Brokers Group, Inc. Class A has greatly reduced the barriers to entry and trading costs for ordinary Americans, leading to an increase in retail participation in the stock market. This trend gained attention in 2021 when many Americans stayed home due to the COVID-19 pandemic and had ample funds to participate in stock speculation through online trading platforms, with targets including GameStop Corp. Class A and large tech stocks. In 2025, artificial intelligence concept stocks such as NVIDIA Corporation (NVDA.US) and Palantir (PLTR.US) became favorites among retail investors. Another popular stock, Tesla, Inc. (TSLA.US), also performed well.