A dealer works at his desk on the ground of the New York Inventory Change on the opening bell on July 18, 2025.
Angela Weiss | AFP | Getty Pictures
The startup gauge of investor sentiment is rife with uneasiness. Counterintuitively, some market strategists assume that might be a bullish signal that forces merchants to get again into the market and drive shares greater.
Bearish particular person investor sentiment towards shares over the subsequent six months rose greater than 10 proportion factors, probably the most since February, within the latest weekly survey by the American Affiliation of Particular person Buyers.
Greater than two-fifths of traders polled, or 43.2%, are actually damaging on how shares will carry out via the early a part of subsequent 12 months, up from 33% final week. The ten.2-point rise was probably the most since a 20-point enhance shortly after the S&P 500 reached a then-record excessive on Feb. 19.
In keeping with Bespoke Funding Group, the week ending Aug. 6 was simply the fourth interval because the bull market started in October 2022 that bearish sentiment had a 10-point weekly enhance.
“The AAII numbers might be risky at instances, and this survey, whether or not it is because of an older cohort or another issue tends to be extra damaging than others,” Bespoke co-founder Paul Hickey informed CNBC. “I will be the primary to say that sure sectors of the market have gotten frothy, however there’s additionally a non-trivial contingent of individuals we discuss to who’re more and more nervous that issues are about to collapse, and that is not often the sentiment you see round peaks.”
AAII readings
| Week Ending | Bullish (%) | Impartial (%) | Bearish (%) |
|---|---|---|---|
| 8/6/2025 | 34.9 | 21.9 | 43.2 |
| 7/30/2025 | 40.3 | 26.7 | 33.0 |
| 7/23/2025 | 36.8 | 29.2 | 34.0 |
| 7/16/2025 | 39.3 | 21.8 | 39.0 |
Supply: AAII Sentiment Survey
Investor sentiment is seen by many as a contrarian indicator. The thought is that when traders are bearish, they’re extra prone to have already offered shares and have more money readily available to place to work. And when extra are bullish, the reverse is true.
“If the ballot is bearish, that’s encouraging,” Sam Stovall, chief funding strategist at CFRA Analysis, stated in an e-mail to CNBC. “The institutional investor (good) cash tends to take a look at retail traders as ‘dumb cash’ and tends to make near-term value efficiency projections accordingly.”
Though market volatility has dramatically lowered because the begin of the 12 months, a collection of damaging information and knowledge releases — resembling tariff hikes on top trading partners, threats on pharmaceutical tariffs, the Federal Reserve’s determination to take care of charges and a weak July jobs report — have weighed on sentiment and saved traders cautious of excessive valuations.
On the identical time, shares have chugged alongside, pushed by energy in company earnings outcomes and client spending, synthetic intelligence enthusiasm, technical energy and extra. The three main U.S. indexes are every within the inexperienced for the 12 months and are on the right track for a weekly achieve.