Retail investors were hit hard on Tuesday as the tech-driven rally that powered much of the year’s market gains lost steam. According to Bloomberg, the Goldman Sachs Retail Favorites Index — which tracks stocks most popular among individual traders — saw its worst performance since April.
The pullback was led by steep drops in Palantir Technologies and Nvidia, after news emerged that a prominent hedge fund manager had placed bearish bets against both companies. “The stumble in retail favorites highlights growing concerns that the tech-led rally may be running out of momentum,” Bloomberg reported.
Investor enthusiasm for artificial intelligence and high-growth technology stocks has fueled much of the 2025 market upswing, but analysts warn that stretched valuations and shifting institutional sentiment could leave retail traders exposed.
“The fact that retail favorites are selling off so sharply is a sign of fragility in this part of the market,” Bloomberg added, citing analysts who said traders may be rotating out of high-risk tech positions amid uncertainty over future earnings and interest rates.
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