Goldman Sachs Warns Retail Trading Slump Threatens U.S. Stock Demand as Household Equity Reliance Hits Record

Retail trading activity in U.S. stocks has fallen roughly 20% from this summer and 45% from the end of 2025, Goldman Sachs said, warning that weakening individual-investor participation is colliding with rising corporate demand for household capital. Retail now accounts for about 9% of total U.S. equity volume, down from 15% at the end of last year and near the lowest level since 2020, Goldman chief U.S. equity strategist Ben Snider said. The bank cited soft consumer confidence, higher energy prices and rising bond yields, and projected real U.S. income growth of only about 1% in 2026, with consumption resilience partly dependent on a falling savings rate. The S&P 500 fell about 2.4% last week amid concern over AI capital spending and financing needs at large technology companies. Hedge funds also cut exposure, with multiple strategies down more than 1% on Thursday, the first such day since the pandemic and the year's second-most volatile session for affected stocks. Goldman estimated households net-bought about $840 billion of U.S. equities in the first half of the year, with equity mutual funds and ETFs drawing roughly $350 billion. But the wealthiest 10% of households hold about 87% of family equity assets, and the top 1% alone hold about 47%, pushing equities to about 55% of household allocations, a record. Goldman expects net supply of U.S. public shares to grow in 2027 at the fastest pace since 2000.