Retail Investors Reduce Stock Purchases to $1 Billion Amid Institutional Buying Surge

Retail investors have sharply cut back on their purchases of individual stocks, with recent data indicating that they spent only $1 billion on single stocks over the last 20 trading days. This figure is close to the lowest total recorded in at least two years, according to The Kobeissi Letter.

In comparison, retail investors had a much higher 20-day purchase total of $20 billion in April 2025. The current decline in retail equity purchases has been significant, with total retail equity purchases falling to just over $10 billion in the same 20-day period, which is a 67% decrease from the $30 billion recorded in February 2026.

While retail investors are pulling back, institutional investors are taking a different approach. They purchased $4.1 billion in US equities in the week ending September 18th, marking their third weekly purchase in four weeks. Hedge funds contributed an additional $1.2 billion in buying during this timeframe, raising their four-week average to $1.6 billion in net purchases.

Retail accounts, on the other hand, have experienced eight consecutive weeks of outflows, selling $2.2 billion last week alone. This trend has resulted in an average weekly exit of $1.9 billion over the past month.

Interestingly, while institutional investors are actively buying, small-cap stocks are facing significant challenges. The Russell 2000 ETF experienced $3.3 billion in outflows last week, marking one of its largest withdrawals in nearly a decade. This trend highlights the ongoing struggle of small-cap stocks as they lag behind larger indices like the S&P 500.