LIVE MARKETS-Individual investor pessimism highest since May 2025 - AAII

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INDIVIDUAL INVESTOR PESSIMISM HIGHEST SINCE MAY 2025 - AAII

Pessimism among individual investors about the short-term outlook for the U.S. stock market advanced in the latest American Association of Individual Investors (AAII) Sentiment Survey. With this, both optimism and neutral sentiment retreated.

Meanwhile, of investors surveyed, more expect large-cap stocks to outperform small- and mid-cap stocks over the next six months.

AAII reported that bearish sentiment, or expectations that stock prices will fall over the next six months, rose 5.6 percentage points to 52.0% (the highest reading since 59.3% on May 1, 2025). Bearish sentiment is "unusually high" and is above its historical average of 31.0% for the sixth consecutive week.

Bullish sentiment, or expectations that stock prices will rise over the next six months, dipped 1.5 percentage points to 30.4%. Bullish sentiment is below its historical average of 37.5% for the fifth consecutive week.

Neutral sentiment, or expectations that stock prices will stay essentially unchanged over the next six months, fell 4.1 percentage points to 17.6%. Neutral sentiment is "unusually low" and is below its historical average of 31.5% for the 87th time in 89 weeks.

The bull-bear spread lost 7.2 percentage points to –21.6% from –14.4% last week. (This week's spread is the most negative it has been since –22.1% on May 8, 2025). The bull-bear spread is "unusually low" and is below its historical average of 6.5% for the sixth straight week.

In this week's special question, AAII asked its members which market-capitalization style of stocks they expect to outperform over the next six months.

Here is AAII's graphic showing how they responded:

(Terence Gabriel)

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