Retail Investor Sentiment Hits 16-Month Low Amid Fed Rate Hike and Oil Price Volatility

Retail investor sentiment has plummeted to a 16-month low, according to a recent survey by the American Association of Individual Investors (AAII).

A record high 53.3% of respondents expressed a negative outlook on equities, while only 28.8% held bullish expectations.

The bearish sentiment is attributed to the Federal Reserve's first interest rate increase since 2023 and sustained high oil prices that continue to weigh on market expectations.

Retail accounts are shifting toward safer asset classes, with over 50% of survey participants reporting above-average cash allocations.