Institutional Investors Drive Stock Buying as Retail Trading Activity Fades

Institutional investors have remained active in U.S. stocks despite a sharp rise in Treasury yields, while retail traders’ participation has declined, according to data cited by CNBC.

Vanda Research said institutional options flows were running at roughly three times the level typical for September. Those flows increased over five trading sessions even as 10-year and 30-year Treasury yields reached their highest levels in more than a decade. Vanda strategist Viraj Patel described the activity as a “reasonably constructive signal for risk appetite,” saying macroeconomic uncertainty had made investors more selective rather than stopping risk-taking.

Vanda said institutions were buying selected artificial-intelligence-related stocks, including Meta Platforms. Meta shares rose nearly 13% in the week after the company introduced its Muse Charm device, following the unveiling of its Muse personal AI agent earlier in the month.

Retail activity, by contrast, has eased after strong performance in 2025, when individual investors frequently bought market declines following President Donald Trump’s tariff rollout. Goldman Sachs found that retail investors’ share of S&P 500 trading volume had fallen to more than three percentage points below its five-year average and was down from a peak nearly a year earlier.

The S&P 500 gained more than 1% last week despite pressure from rising bond yields, leaving the index positive for the month.