Retail Investors' Impact on Wall Street Grows Amid Volatility

Small investors outperform major index funds as trading activity surges 47% in 2025

Published on Feb. 23, 2026

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Retail investors accounted for $5.4 trillion in trading activity across stocks and ETFs in 2025, a nearly 47% increase from the previous year. This growth has helped dispel the myth of retail investors as 'dumb money,' with many outperforming popular index funds. The rise of mobile trading apps, zero-commission trading, and online investing communities have ushered in a new era of do-it-yourself trading, especially during the COVID-19 lockdowns and a backdrop of mostly uninterrupted stock market gains.

Why it matters

The increasing influence of retail investors on Wall Street challenges the traditional dominance of institutional investors and highlights the growing power of individual investors in shaping market dynamics, especially during periods of volatility. This shift has implications for how the market functions and the strategies employed by both retail and professional investors.

The details

Retail investors have become more active and sophisticated traders, using options, micro-cap stocks, and other investment vehicles to capitalize on market swings. They have been particularly active in 'buying the dip' during market downturns, accounting for over $5 billion in stock purchases over two days in April 2025 when the S&P 500 dropped more than 10%. Retail investors have also had a significant impact on the price of silver, driving it to record highs last month by buying a record amount of silver ETFs.

  • In April 2025, retail investors bought over $5 billion in stocks over two days when the S&P 500 dropped more than 10%.
  • In October 2025, retail investors were particularly active in the last week of January, coinciding with the S&P 500 climbing to an all-time high.

The players

Joe Mazzola

Head trading and derivatives strategist at Charles Schwab.

Steve Sosnick

Chief strategist at Interactive Brokers.

Frank Sabia

A high school registrar from Encino, California, who started investing in 2018 and now trades in cryptocurrencies, options, and other assets.

Noah Goodwin

A junior in high school in the L.A. suburb of Castaic who started options trading on Robinhood Markets early last year using his mother's custodial account.

Andy Hu

A financial analyst in Los Angeles who balances higher-risk short-term trades with a long-term investment portfolio.

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What they’re saying

“I personally want to dispel the myth of retail being dumb money, because it's not dumb money anymore.”

— Joe Mazzola, Head trading and derivatives strategist at Charles Schwab (Anaheim, California event)

“In April, it was retail (investors) that bought the dip. They were the ones that were willing to step in front. They saw the opportunity.”

— Joe Mazzola, Head trading and derivatives strategist at Charles Schwab (Anaheim, California event)

“The risk to it is that for many of them it's become sort of mechanical.”

— Steve Sosnick, Chief strategist at Interactive Brokers (WRAL.com)

What’s next

The judge in the case will decide on Tuesday whether or not to allow Walker Reed Quinn out on bail.

The takeaway

This case highlights growing concerns in the community about repeat offenders released on bail, raising questions about bail reform, public safety on SF streets, and if any special laws to govern autonomous vehicles in residential and commercial areas.