Small Investors' Impact on Wall Street Grows Amid Volatility

Retail investors outperformed major indexes in 2025 as their trading activity surged nearly 47%

Published on Feb. 23, 2026

Got story updates? Submit your updates here. ›

A new analysis shows 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" as they have outperformed major index funds like the S&P 500 and Nasdaq 100. The rise of mobile trading apps, zero-commission trading, and online investing communities have ushered in a new era of do-it-yourself trading, with many young newcomers joining the market during the COVID-19 lockdowns.

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 traders, especially during periods of market volatility. This shift could have broader implications for how markets function and the strategies employed by professional investors.

The details

Retail investors have become more active and sophisticated traders, using options, cryptocurrencies, and other investment vehicles beyond just stocks and ETFs. They have demonstrated a willingness to "buy the dip" during market downturns, accounting for over $5 billion in stock purchases during a two-day plunge in April 2025 triggered by new tariff announcements. However, this strategy has also led some retail investors to make trading decisions without fully considering the risks involved.

  • In April 2025, retail investors bought over $5 billion in stocks during a two-day market plunge of more than 10%.
  • In October 2025, retail investors had one of their biggest buy-the-dip days of the year when the market dropped 2.7% after a threat of increased tariffs on China.
  • Retail investors' trading activity hit an all-time high on a rolling monthly basis in January 2026, coinciding with the S&P 500 climbing to a new record high.

The players

Joe Mazzola

Head trading and derivatives strategist at Charles Schwab.

Frank Sabia

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

Noah Goodwin

A junior in high school in the Los Angeles suburb of Castaic who started options trading on Robinhood Markets early in 2025 using his mother's custodial account.

Andy Hu

A financial analyst in Los Angeles who has 50% of his investment portfolio in the SPDR S&P 500 ETF Trust and trades in micro-cap stocks for short-term gains.

Steve Sosnick

Chief strategist at Interactive Brokers, who says retail investors are "considerably more important as a force in markets right now" compared to institutional investors.

Got photos? Submit your photos here. ›

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 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 event)

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

— Steve Sosnick, Chief strategist at Interactive Brokers (Interview)

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.