A dealer works at his desk on the flooring of the New York Stock Exchange at the opening bell on July 18, 2025.
Angela Weiss | AFP | Getty Images
The newest 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 stocks greater.
Bearish particular person investor sentiment towards stocks over the subsequent six months rose greater than 10 proportion factors, the most since February, in the latest weekly survey by the American Association of Individual Investors.
More than two-fifths of buyers polled, or 43.2%, at the moment are detrimental on how stocks will carry out by means of the early a part of subsequent 12 months, up from 33% final week. The 10.2-point rise was the most since a 20-point enhance shortly after the S&P 500 reached a then-record excessive on Feb. 19.
According to Bespoke Investment Group, the week ending Aug. 6 was simply the fourth interval since the bull market started in October 2022 that bearish sentiment had a 10-point weekly enhance.
“The AAII numbers can be volatile at times, and this survey, whether it’s due to an older cohort or some other factor tends to be more negative than others,” Bespoke co-founder Paul Hickey advised CNBC. “I’ll be the first to say that certain sectors of the market have gotten frothy, but there’s also a non-trivial contingent of people we talk to who are increasingly worried that things are about to fall apart, and that’s not usually the sentiment you see around peaks.”
AAII readings
| Week Ending | Bullish (%) | Neutral (%) | 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 |
Source: AAII Sentiment Survey
Investor sentiment is considered by many as a contrarian indicator. The concept is that when buyers are bearish, they’re extra prone to have already bought stocks and have additional cash on hand to place to work. And when extra are bullish, the reverse is true.
“If the poll is bearish, that is encouraging,” Sam Stovall, chief funding strategist at CFRA Research, mentioned in an electronic mail to CNBC. “The institutional investor (smart) money tends to look at retail investors as ‘dumb money’ and tends to make near-term price performance projections accordingly.”
Although market volatility has dramatically lowered since the begin of the 12 months, a sequence of detrimental information and information releases — corresponding to 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 buyers cautious of excessive valuations.
At the similar time, stocks have chugged alongside, pushed by power in company earnings outcomes and client spending, synthetic intelligence enthusiasm, technical power and extra. The three main U.S. indexes are every in the inexperienced for the 12 months and are on course for a weekly acquire.