Tadawul Shares Close Flat as Saudi Banking Giants Report Earnings

By Tarini Parti

Scott Foster said he voted for President Trump — after considering not voting at all — because of the relatively strong prepandemic economy during his first term.

He remained optimistic during the first few weeks after Trump took office. But once the tariff threats began, he said he started losing hope for an economic turnaround. Foster said he has avoided looking at his retirement account.

"If things don't turn around, it's going to be hard to continue to support him overall," said Foster, 40, a resident of Alexandria, Va., who works in education policy.

The effects of Trump's fast-paced, far-reaching policy changes are reverberating across the country as the president hits the 100-day mark in office. In more than a dozen interviews with people of all political affiliations, voters said the president's actions have already directly affected their day-to-day lives in a way they can't remember a previous administration doing.

Democrats said Trump's second term has been worse for them than they expected, pointing to instability caused by the president's policies. People who voted for Trump were more divided, with some Republicans and independents raising concerns about the impact of tariffs and the cuts to government programs carried out by billionaire Elon Musk. Others said they were thrilled to see the president quickly enacting his campaign promises.

Doug Wyatt, 71, a retired police officer from Eatonton, Ga., said Trump's trade policies and his deportation campaign were making the country better for future generations, despite some immediate pain.

"I think what he's doing is needed," Wyatt said. "He's brave enough to do it."

Michelle Sanford said she is getting hit on all fronts by Trump's policies.

Sanford works for a canning company that is struggling with the fallout from Trump's tariffs, which have also hit her retirement account. Her husband is worried that potential Medicaid cuts being debated by Republicans could threaten the payments he relies on to offset the cost of his health expenses. And she is concerned that her college-age son — who is biracial and benefited from diversity, equity and inclusion programs growing up — will no longer have access to those resources amid the Trump-driven backlash to DEI.

"This is beyond my wildest dreams," said Sanford, 53, who lives in Eagleville, Pa., and voted for Kamala Harris. "I didn't picture it being this bad."

A Wall Street Journal poll released earlier this month found that public confidence in Trump's economic plans has waned since the election. Three-quarters of voters said that tariffs will raise prices on the things they buy, up from 68% who said so in January.

Since Trump took office, the S&P 500 index was down roughly 10% through Wednesday, the index's worst performance in the first 94 days of any presidential term on record, according to Dow Jones Market Data.

But some Trump supporters such as Gene Tobin, 50, a resident of Traverse City, Mich., said they agreed with the president that the final result of his trade policies will outweigh the problems they might cause. Trump has said his tariffs will force more companies to make their products in the U.S., boosting the American manufacturing sector.

"I can go through my house and pretty much everything here says, 'Made in China,'" Tobin said. "I'm sure it's going to affect me. But long term, I think it's going to make prosperity for America that is long-lasting."

Tobin, who works in construction, said he made the most of the volatile markets by buying more stocks when it dropped. "My wife's going, 'Oh, my God,' and I said, 'I'm going to buy more. It's cheaper. That's when you're supposed to buy it.'"

In rural Colorado, the Trump administration's decision to freeze funding for some agricultural programs has caused widespread frustration, said Mike Homiak, 31, a rancher from Center, Colo., who voted for independent candidate Cornel West.

Ranchers who were expecting reimbursements for water-conservation projects under a law passed during the previous administration are now in limbo. Those ranchers have also had a hard time connecting with government officials, as federal jobs get cut, Homiak said.

Homiak said he is now trying to figure out how to deal with necessary projects on the ranch.

"The economic instability and funding cuts associated with the Trump administration have caused me to tighten my belt," he said.

He also said he is worried about the ripple effect of Trump's tariffs on his girlfriend's employment, given she works for a consumer-goods company, which manufactures most of its products in China. "We have been very worried lately about the prospect of her getting laid off, and that would be more than half our income," he said.

Jackie Mehler, 75, a retiree from Erie, Pa., who voted for Harris, and her husband rely on their Social Security checks. They have grown increasingly concerned that Republicans could make cuts to the program, pointing to Trump and Musk's comments that Social Security is rife with fraud.

She has been budgeting around higher grocery prices in recent years, making inexpensive soup that can last for several meals. But Trump's trade policies will make it even harder, she said.

"We've been trying to make ends meet," she said. "Hopefully, our car doesn't die."

Mehler, who suffers from pulmonary arterial hypertension, also relies on a costly prescription drug. She is worried that coming tariffs on pharmaceuticals could make it harder to access her medication, since the pharmaceutical industry counts on manufacturing outside the U.S. "I'm just really afraid," she said.

Write to Tarini Parti at tarini.parti@wsj.com

Ed Lin

Anguish over investments isn't its own disorder apart from generalized anxiety disorder, a group of New York City psychologist say, but it certainly felt like a specific pain to anyone with a stock portfolio or retirement account when the market dove earlier this month.

President Donald Trump announced a raft of tariffs on what he called "Liberation Day" after the market closed April 2. The S&P 500 went on to drop 11% through the close on April 8, as investors fretted over a global trade war; the Nasdaq Composite dove more than 13%, crunching tech-heavy portfolios. Since then, the Trump administration has announced delays of tariffs, and some walkbacks. Despite a rally in the past week, we're still under April 2's close, and the year-to-date losses in the S&P 500 and Nasdaq now stand at 6% and 10%, respectively. The Cboe volatility index itself has been volatile, with the VIX lurching day to day, and sometimes hour to hour. There's a natural human response to the numbers alternately flashing red and green.

"Investment and money mean a lot to different kinds of people," says Robert L. Leahy, Ph.D., director of the American Institute for Cognitive Therapy. "It means security, freedom, status, success, how well you are doing in general, life chances (the goods and advantages that money can buy), etc. So many people are anxious, some are angry, many are confused, some are depressed, and some are rather indifferent."

"I have certainly seen an uptick in anxiety related to the economy and the value of patients' wealth portfolios," says Christopher J. Ceccolini, Ph.D., assistant professor of psychology in clinical psychiatry, Weill Cornell Medicine. "I hear things like, 'I graduated college in the Great Recession, and had my child during Covid. It's never easy for us.'"

Daniel Eden, M.D., Daniel Eden, M.D., a psychiatrist at Weill Cornell Medicine and NewYork-Presbyterian, and Chief of Ambulatory Access and Innovation, NewYork-Presbyterian, says, "The pain is visceral — and neurobiologically, that's literal. Brain-imaging studies show that monetary losses can activate threat responses in the brain akin to physical danger." Eden adds, "What we're witnessing is the collision of two hard truths: Markets hate uncertainty, but the human brain hates lack of control even more."

Losing money isn't an abstract idea, and neither is a potential trade war.

Julia Samton, M.D., a psychiatrist and neurologist, and co-founder of the Midtown Practice, works with business owners who rely on foreign countries to sustain manufacturing. "Some have been to Washington to appeal to lobbyists and Congressmen and women. Others are sourcing options, or facing the reality that their businesses will no longer be viable."

Samton encourages her patients to identify what they can and cannot control. "Trying to control factors and situations that are outside of our control is the biggest reason that people make mistakes, and develop severe anxiety."

Why are we talking to four mental-health professionals who work in New York City? Consider the confluence of circumstances that make the Big Apple the center of finance and financial anxiety. First of all, there are more practicing psychologists in the New York metro area than in any other in the U.S., 4,100 as of May 2023, compared with 1,670 in the Los Angeles area, according to the U.S. Bureau of Labor Statistics. The same agency found the New York metro area also had the most personal financial advisors, as of May 2024.

Also, there are far more millionaires in New York City than any other American city as of December 2023, according to residence and citizenship advisory firm Henley & Partners. Finally, the Council for Community and Economic Research found that Manhattan had the highest cost of living compared with the rest of the U.S. for the first quarter of 2024.

Put all that together, and it's obvious why Wall Street is more than just an institution in New York City. It's also a subway stop for two different lines, literally integrated into New Yorkers' lives.

The author of 30 books in psychology, Leahy says troubled investors can take some solace in a so-called life portfolio, "which should be larger than your financial portfolio." The life portfolio includes "all the pleasurable and meaningful experiences in your life and might include your spouse, children, pets, interests, hobbies, health, friendships, spiritual life, entertainment, and opportunities for professional and personal growth."

He suggests setting aside 20 minutes a day to worry about the market — "an appointment with your worries" — and to even write down concerns to address during worry time. "Most people can do part of this, and they find that it is helpful to free them up," Leahy says.

If that seems too unrealistic to put into practice, it certainly beats giving in to panic.

"Some individuals may cling to a sense of normalcy through increased spending — buying luxury items pre-emptively, for example, out of fear that tariffs or inflation might soon make them unaffordable," says Eden. "Others may retreat entirely — delaying home purchases, canceling vacations, or even considering downsizing, despite having significant financial cushions."

Many of Ceccolini's clients are coping by "staying the course." "With so much uncertainty due to tariffs, many want to keep things as normal as possible for as long as possible," he says.

The ability of investors to ride out the uncertainty may be related to experience that comes with age.

"It's interesting that my patients who are very experienced investors with decades of experience are less worried than the younger investors," says Leahy.

"Many of my patients have weathered financial crises before, such as 2008, and 2020, and are able to put some of their fears into context," says Samton.

And how are our psychologists themselves holding up?

"Certainly, there is an uptick [in uncertainty] right now, but I have been through a number of stock-market corrections and recessions, and we generally bounce back with time," says Leahy, 79.

Before medical school, Eden, 36, played poker to earn money on the side. "It taught me how to think probabilistically, manage risk under pressure, and recognize the difference between variance and poor decision-making. These days it's a hobby and passion, but the lessons stick with me. In both poker and investing, emotional control is everything."

"I am in the same boat as many of my patients," says Ceccolinni, 36. "I have similarly watched my 403(b) and other investments plummet in less than one week. I remind myself that I'm playing the long game with this money; saving for retirement, the surrogacy process, a college fund. Combining my rational mind's analysis with my emotional mind's signals allows me to harness my 'wise mind.'" Using that concept, Ceccolinni says he "can persevere through the unpredictability by attending to what I can control in my life, and not reacting impulsively to fear."

"I have had my moments [of anxiety], but I find as I get older, I have fewer," says Samton, 54. "I try to stay in my lane, and hand it over to the experts. I have made peace with the downside of taking a more conservative path financially. I know what it takes to prioritize my mental health, and I work every day to keep mine steady so I can feel a sense of ease, and help others do the same."

Write to Ed Lin at ed.lin@barrons.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

According to Sudeep Shah of SBI Securities, technical structure indicates that the upside momentum is losing steam, and Nifty is likely to enter a consolidation phase in the coming sessions as the market digests recent gains.

In the case of Bank Nifty, he believes the presence of strong support levels and overall positive structure suggests that the index is unlikely to undergo a deep correction in the immediate term.

Meanwhile, the FII data points toward a constructive yet balanced approach, where buying interest in cash markets is complemented by a guarded view in futures, indicating optimism with a layer of prudence, said the Deputy Vice President and Head of Technical and Derivative Research at SBI Securities in an interview with Moneycontrol.

He picks Mphasis and Grasim Industries for next week.

Do you think the Nifty has made a short-term top and will consolidate for a couple of weeks before finding a firm direction?

The benchmark index, Nifty, extended its upside journey this week (ended April 25), continuing the sharp rally that began from the low of 21,743.65. Over the course of just 12 trading sessions, the index surged more than 2,600 points, reflecting strong bullish momentum. However, this rally hit a brief pause amid anticipated geopolitical tensions between India and Pakistan, triggering a minor throwback.

Notably, the throwback was arrested near a key technical support — the neckline of a double bottom pattern, which coincides with the 8-day EMA. This level acted as a cushion, helping the index recover slightly before eventually closing the week at 24,039, registering a modest gain of 0.79 percent. On the weekly chart, Nifty has formed a small-bodied candle with a long upper shadow, a classic indication of selling pressure at higher levels. While the index remains above its short and long-term moving averages, it’s important to note that the slope of short-term averages is flattening, hinting at waning momentum.

From an indicator perspective, the daily RSI (Relative Strength Index) remains in bullish territory, though it has started to trend lower, while the MACD (Moving Average Convergence Divergence) histogram has declined for the last two sessions, both suggesting fading bullish strength. Overall, the technical structure indicates that the upside momentum is losing steam, and Nifty is likely to enter a consolidation phase in the coming sessions as the market digests recent gains.

Talking about crucial levels, the zone of 24,350-24,380 will act as a crucial hurdle for the index. If the index sustains above 24,380 levels, then we may witness a sharp upside rally up to the level of 24,600, followed by the 24,850 level in the short term. On the downside, the zone of 23,800-23,750 will act as important support for the index as the 23.6 percent Fibonacci retracement level of its prior upward move (21,744-24,365) is placed in that region. If the index slips below 23,750 levels, then the next crucial support is placed at the 23,350 levels.

How are the FIIs positioning themselves after the recent rally?

Over the last eight consecutive trading sessions, FIIs have emerged as net buyers in the Indian equity markets, signaling renewed confidence in domestic fundamentals. This buying spree reflects positive sentiment towards Indian equities.

In the derivatives segment, the FII long-short ratio in index futures currently stands at 37.63 percent, suggesting a moderately cautious stance. While it’s not overly bullish, it indicates a gradual unwinding of short positions and buildup of long positions — a sign that FIIs are selectively participating in the uptrend but are still hedging against near-term volatility.

Overall, the FII data points toward a constructive yet balanced approach, where buying interest in cash markets is complemented by a guarded view in futures, indicating optimism with a layer of prudence.

What are your top two stock picks for the coming week?

Mphasis

The Nifty IT has witnessed a strong rebound last week. It has strongly outperformed frontline indices. The stock has surged above its short-term moving averages, i.e., 20 and 50-day EMA (Exponential Moving Average) levels. These averages are starting to edge higher, which is a bullish sign. Further, the daily RSI has surged above the 60 mark, and it is on a rising trajectory. Hence, we believe the stock is likely to continue its northward journey and test the level of Rs 2,800 in the short term. On the downside, the zone of Rs 2,420-2,400 is likely to provide the cushion in case of any immediate decline.

Grasim Industries

The stock is in an uptrend as it marks the sequence of higher tops and higher bottoms. Also, it is trading above its short and long-term moving averages. Most noteworthy, recently, the daily RSI took support near the 60 level and witnessed a rebound, which is a bullish sign as per RSI range shift rules. Hence, we recommend accumulating the stock in the zone of Rs 2,740-2,720 level with a stop-loss of Rs 2,640. On the upside, it is likely to test the level of Rs 2,900 in the short term.

Are you bullish on UltraTech Cement and ICICI Bank?

UltraTech Cement

The stock is in a strong uptrend as it marks the sequence of higher tops and higher bottoms. Also, it is trading above its short and long-term moving averages. The daily RSI is in a bullish zone, and it is rising mode, which is a bullish sign. Hence, we believe the stock is likely to continue its northward journey in the short term.

ICICI Bank

After registering a high of Rs 1,436, the stock has witnessed a throwback. The throwback was halted near the 23.6 percent Fibonacci retracement level of its prior upward rally (Rs 1,265-Rs 1,436), and it coincides with the 20-day EMA level. Currently, the stock is trading above its short and long-term moving averages, which is a bullish sign. The daily RSI is in bullish territory. Going ahead, any sustainable move above the level of Rs 1420 will lead to resume its northward journey.

Do you expect a major breakout in the Nifty FMCG index in May?

No, a major breakout in the Nifty FMCG index is unlikely in May, as the weekly chart suggests a short-term consolidation phase. The index is expected to remain rangebound between 55,500 and 58,100. A decisive breakout or breakdown beyond this range could trigger a strong trending move in either direction.

Are technical indicators suggesting that the Nifty Bank may not undergo a major correction despite near-term consolidation?

Yes, technical indicators currently point towards a phase of consolidation rather than a major correction for Nifty Bank. The banking benchmark index has outperformed frontline indices in recent sessions and even registered a fresh all-time high of 56,098.70 during the first half of last week. Although the index witnessed a throwback after its peak, it managed to find support at the 8-day EMA, a sign of underlying strength.

On the weekly chart, a small-bodied candle with both upper and lower shadows suggests some indecision at elevated levels, calling for near-term caution. However, the broader structure remains intact, with the index trading well above both its short and long-term moving averages — a distinctly bullish signal.

While the daily RSI remains in the bullish zone, it is showing signs of easing, hinting at a possible pause or consolidation following the recent rally. Still, the presence of strong support levels and overall positive structure suggests that the index is unlikely to undergo a deep correction in the immediate term.

Talking about crucial levels, the zone of 54,200-54,100 will act as immediate support for the index. Any sustainable move below the level of 54,100 will lead to further correction up to the level of 53,400. While on the upside, the zone of 55,500-55,600 will act as a crucial hurdle for the index. Any sustainable move above the level of 55,600 will lead to resuming its northward journey. In that case, the index is likely to test the level of 56,300, followed by 57,000 in the short term.Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

By Rebecca Picciotto | Photographs by Sylvia Jarrus for WSJ

The struggle to find a cheap house in America is transforming some places with lower-priced homes into battlefields, pitting Wall Street landlords and other investor-owners against traditional buyers.

That clash is helping boost home values in Toledo, Ohio, catapulting it to the top of The Wall Street Journal/Realtor.com Housing Market Ranking this quarter. The rankings identify top markets based on home value appreciation, local economic growth, lifestyle amenities and climate resilience.

Toledo represents one of the increasingly rare affordable housing markets in the U.S. The city of about 265,000, situated on the western tip of Lake Erie and home to growing businesses such as clean energy and digital infrastructure, has become a haven for buyers seeking low living costs in a centrally located midsize metro area.

The median list price in Toledo jumped 18% annually in March to $235,000, according to Realtor.com. That is still about $200,000 cheaper than the national median, the firm said.

Many out-of-state investors view the lower home prices in Toledo and other heartland cities as a cheaper entry point than popular markets in the Sunbelt.

"This market is a little gold mine in America," said Jack Garayan, who rents out two single-family homes and an eight-unit apartment complex in the Toledo metro area.

Garayan lives in Fresno, Calif. He has never set foot in Toledo, and he currently has no plans to visit. But he and two friends see their Toledo real-estate portfolio as a retirement fund. Over the past year, their single-family rental homes have both appreciated 50% or more. The first went from $133,000 to $200,000 and the second from $137,000 to $220,000.

The overall share of Toledo single-family homes purchased by investors has crept steadily upward, doubling from 15% in February 2018 to 30% in February of this year, according to data firm Cotality, formerly known as CoreLogic.

"There's been a lot of demand from Wall Street," said David Mann, president and chief executive of the Lucas County Land Bank.

Jon Modene, a Toledo real-estate broker, said investors from New York City, San Francisco, Italy and Canada have become a much larger portion of his client base over the past decade. His biggest client is a hedge fund.

LadderUp Housing is working on behalf of the city's less well off. The Toledo company acquires homes for low-income residents and has purchased 49 homes since 2021. About 75% of that portfolio was previously owned by either limited-liability companies or sellers who didn't live in the house as their primary residence, according to Chief Executive Tom Voutsos.

Surging demand means trouble for traditional buyers as the house hunt gets more competitive than ever and prices rise higher.

Leah and Nell Zimmerman, both born and raised in Toledo, felt the sticker shock firsthand when they started looking to purchase a home in late November. They expected the home buying process to be just as smooth as when their parents bought in Toledo a generation earlier: Find a house, make one offer, get accepted, move in.

"It was not that simple," said Nell, who is 44 and works in customer service and podcasting.

The Zimmermans found themselves competing against all-cash buyers bidding well over the asking price, sometimes a sign of an investor. The couple's offers, backed by a loan from the Federal Housing Administration, struggled to keep up. They lost five bids before their sixth finally got accepted.

"We were just getting completely blown out of the water each time," said Leah, a 49-year-old nurse at the University of Toledo Medical Center. The couple is expecting to close on the house in mid-May, months later than they originally expected.

The demand for housing is a boon for sellers. Natalie Hood, a 39-year-old special-education preschool teacher who grew up in Toledo and still lives there, said she received more than 20 offers on her home in 2021, including an all-cash bid, which she declined.

"There are a lot of cash offers right now," said Tim Fisher, a Toledo real-estate agent. Paying all cash upfront and forgoing home appraisals are typical investor moves to make their bids more appealing, real-estate agents say.

Toledo is within driving distance from the Detroit airport and other urban centers such as Cleveland and Columbus. And Toledo residents rave about community attractions like the local zoo, art museum and the downtown baseball stadium where die-hard sports fans root for the minor league Mud Hens.

The city is considered less of a natural-disaster risk, which can keep home insurance premiums down.

First Solar got its start in the Toledo metro area and Meta is building an $800 million data center in a suburb right outside the city. Stellantis has a big Jeep-building factory in the city. Dubbed the Glass City, it is the headquarters of manufacturers like Owens Corning and Libbey.

For all of its perks, Toledo has experienced declining population growth for decades, compounded by the 2008-09 financial crisis. And the unemployment rate was 6.6% in February, the highest of the top 20 metros on the WSJ/Realtor.com index. For investors, the lack of a major boom in Toledo is what makes it a hidden gem.

"An enormous amount of this attention is being driven by investor capital that's looking at a pretty good buy," said Mann of the Lucas County Land Bank. "Because we just haven't been on people's radar for a long time."

News Corp, which owns the Journal, also operates Realtor.com.

Write to Rebecca Picciotto at Rebecca.Picciotto@wsj.com

By Gregory Zuckerman and Gunjan Banerji

In the market chaos of recent weeks, professional investors headed for the exits while individuals held steady.

It's a dynamic that upends the conventional wisdom on Wall Street about how investors behave during market turmoil.

So far this year, hedge funds have sold over $1 trillion more shares than they have purchased, even as individuals have made $50 billion a month in net stock purchases, "with little interruption," according to JPMorgan.

Wall Street has long derided everyday investors as " dumb money," prone to making decisions based on fear and greed. By contrast, hedge funds and institutional investors were dubbed "smart money," for their historic ability to lean on reams of data and analysis and ignore emotion-driven swings.

The popular notions of how those groups behave have been increasingly out of sync with reality. Recent turbulence is crystallizing that shift.

In recent years, big funds have become more likely to flee the market in a downturn to avoid potential losses. Amateur investors have altered their approach, too. The stampede into passively managed index funds, the growth of 401(k)s, and years of getting rewarded for buying every dip mean that — instead of running for the exits when markets get wild — many individuals now storm in or simply stay put.

"There are these huge pools of capital managed by retail investors that are acting in pretty sensible ways," says Victor Haghani, a former partner at hedge fund Long-Term Capital who now runs Elm Wealth, an advisory firm that manages the ELM Market Navigator ETF. "It's not shakable and it is pretty static."

A long list of investing gurus, including Jeremy Siegel, a finance professor at the University of Pennsylvania's Wharton School, and the late Vanguard founder John Bogle have preached the advantages of sticking with stocks, no matter the market. Given enough time, markets usually go up, the thinking goes.

It's unclear which group's bet will prove prescient. There's little indication that market swings are easing, and there's still uncertainty around the Trump administration's ultimate approach to global tariffs and any resulting economic ripple effect. After the 2000s dot-com implosion, it took nearly seven years for the S&P 500 to recover, bears note.

Dr. Gerald Rogan, a 78-year-old retired physician in Sacramento, Calif., has seen many market downturns and recoveries over the years. He frequently checks a watchlist with his stock positions in his Fidelity account. On big down days, he hunts for opportunities to scoop up more shares.

While the market swooned in early April, he says he made 10 buys in a single day, a record for him. He bought up shares of the pharmaceutical company Organon, United Parcel Service and Ford. He shies away from what he sees as riskier trades like options and cryptocurrencies, but says he poured thousands of dollars into the stock market this month.

"When the market goes down, things are on sale," Rogan said. "I don't get pessimistic."

More employees these days are offered 401(k)s rather than pension plans, and individuals have learned it often makes sense to avoid adjusting investment portfolios amid market chaos. For the first time, half of private-sector workers are now saving in 401(k)s.

As news of President Trump's tariffs roiled the markets, Vanguard estimates that more than 97% of investors in its 401(k) retirement plans didn't make trades through mid-April. Around a fifth of investors increased their saving rate.

In contrast, hedge-fund clients of Goldman Sachs sold more stocks on April 3 and April 4 than any other two-day period in 15 years, while an index measuring big institutional investors' exposure to the stock market tumbled this month to its lowest level since late 2023.

As the pros sold, individual investors pounced. They picked up more than $4.5 billion worth of stocks and ETFs on April 3, when the S&P 500 plunged almost 5%, making it their strongest buying day on record, according to a JPMorgan analysis of retail brokerage data.

Their commitment to stocks during the recent chaos is striking. In 2020, for example, some of the darkest days for the market were typically met with selling among individuals, according to JPMorgan's Emma Wu. This time, there's evidence that everyday investors have been more eager to buy than ever before.

Exchange-traded and mutual funds tracking stocks, which are often owned by households, recorded around $50 billion of inflows in one week in early April, the biggest haul of the year, according to Deutsche Bank.

U.S. households collectively hold at least $35 trillion in stocks, or 38% of the market, making them the largest owners of American equities and giving their behavior incredible heft in the market, according to Federal Reserve and Goldman Sachs data.

"There is a distinct difference in behavior," says Michael O'Rourke, chief market strategist at JonesTrading. Over the past decade or so, he says, big investors have tended to sell more than normal during a market setback, and individual investors have become accustomed to buying market dips.

Hedge funds aren't the first out the door necessarily because they panic or get weak in the knees. These funds usually rely on leverage, or borrowed money, to juice their returns. When stocks fall, the collateral they've given their lenders to back these loans drops in value, forcing them to come up with quick cash to cover the hole. So they do some selling to raise this money.

And more funds than ever rely on predetermined limits on how much they are willing to lose. So-called multimanager firms have soared in size, dominating the industry by promising steady returns. When they incur even 5% losses, many begin selling, to avoid deeper losses.

Some traders said that at times in April it seemed like investors were looking to get out of their bets at any price. "We're not in the business of riding out markets," said the head of one hedge fund.

Another reason hedge funds are so active amid the turbulence is their clients expect them to search for opportunities, the funds say.

Adam Schwartz, who runs Black Bear Value Partners, a Florida hedge fund, has been buying and selling lately. He has been especially active betting against companies he believes don't have pricing power or other means to handle high tariffs, and buying those that do.

The market's turmoil "is an awesome opportunity to take advantage of sellers who have their hair on fire," he told his clients earlier this month. "It is often the most uncomfortable environments that provide the best opportunities."

His fund is down less than 1% this month and down 1.5% for the year, according to an investor.

Arthur Conlan, a 67-year-old retiree in Palm Beach, Fla., said he was astonished to see the value of his portfolio drop so quickly in recent weeks. He has typically poured most of his investment money into the stock market and avoided bonds, but that has given him little cushion during the selloff. The aggressive selling that swept markets made him uncomfortable and dinged his holdings like Apple. Still, he says he didn't sell any stocks.

"I'm trying to be like Buffett," Conlan said, referring to the legendary Berkshire Hathaway CEO. "You have to learn to be patient."

Write to Gregory Zuckerman at Gregory.Zuckerman@wsj.com and Gunjan Banerji at gunjan.banerji@wsj.com

Investor Sentiment Readings

High bullish readings in the Consensus stock index or in the Market Vane stock index usually are signs of Market tops; low ones, market bottoms.

 
                              Last Week  2 Weeks Ago  3 Weeks Ago 
Consensus Index 
Consensus Bullish Sentiment   42%        43%          42% 
AAII Index 
Bullish                       21.9%      25.4%        28.5% 
Bearish                       55.6       56.9         58.9 
Neutral                       22.5       17.7         12.5 
Market Vane 
Bullish Consensus             41%        43%          42% 
TIM Group Market Sentiment 
Indicator                     49.8%      47.3%        48.3% 
Sources: Consensus Inc.; American Association of 
Individual Investors; Market Vane; TIM Group 
 
 

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