Retail investors in the U.S. are starting to sell individual stocks but are still consistently adding to ETFs. According to data from Vanda, the capital flow into individual stocks by U.S. retail investors has noticeably weakened recently. The net buying trend seen over the past few months is disappearing, and in the last few trading days, it has even turned into net selling. Meanwhile, ETF capital flows haven’t shown the same shift. Retail investors are still maintaining relatively stable net buying. In other words, U.S. retail investors haven’t truly retreated from the stock market but have started actively reducing the risk of individual stocks, shifting more of their positions into ETFs. This is actually a pretty clear downgrade in risk appetite. A few months ago, when AI, semiconductors, and high-volatility tech stocks were surging, retail investors were willing to FOMO. But now that the volatility of these stocks has significantly increased, the first thing retail investors are cutting back on is their positions in high-volatility sectors like semiconductors. At the same time, ETFs are still being heavily bought, indicating that retail investors haven’t turned pessimistic about the U.S. stock market overall. They’re just less willing than before to bet on individual companies outperforming the market. When retail investors directly buy individual stocks, their funds can spread across many companies. But when funds shift to ETFs, especially index-based products, the new capital gets redistributed according to index weightings. Larger companies typically receive more passive inflows. The result could be that indices remain strong, the largest companies continue to attract capital, but smaller stocks and previously popular retail-driven names start to lack incremental buying. Overall, at least from the perspective of capital flows, U.S. retail investors haven’t abandoned the stock market yet. They’re just transitioning from chasing high returns to seeking stable profits. A few months ago, retail investors were betting on FOMO-driven gains in semiconductors and AI stocks. Now, they’re hoping the U.S. stock market as a whole can continue to rise. @Gate Crypto, U.S. stocks, Hong Kong stocks, Korean stocks, gold, CFDs, prediction markets—all in one place for trading!