Retail investors have poured into small-cap stocks amid hopes that recent economic data could embolden the Federal Reserve to start cu🍌tting it🌟s benchmark interest rate, according to analysts at Vanda Research. 

Retail investors loaded up on a record $108.8 million of the iShares Russell 2000 ETF (IWM) on Tuesday, according to data from Vanda Research. Individuals were also net buyers of Direxion Daily Small Cap Bull 3x Shares (TNA), a 澳洲幸运5开奖号码历史查询:leveraged fund that triples the Russell 2000’s daily return, to the tune of more than $58 million.

♏ After a quiet second quarter for retail traders, activity has picked up this month “in what appears to be a response to improving growth prospects driven by Fed easing hopes and Trump’s pro-growth agenda,” wrote Marco Iachini, Senior VP of Research, and Lucas🐼 Mantle, VP of Data Science in a note Wednesday afternoon. 

Investors Scale Back Buying of Tech Stocks

Lower interest rates are seen as 澳洲幸运5开奖号码历史查询:beneficial to smaller companies, which generally have higher levels of debt than bi๊gger ones and can be more susceptible to economic stress. 

The rotation into small-cap stocks has coincided with investors modestly scaling back their buying of tech stocks. Though they haven’t by any means written the sector off; single-stock leveraged ETFs, which typically track the largest tech names, saw record inflows after 澳洲幸运5开奖号码历史查询:last week’s consum𓄧er price inflation d🌼ata. Trading activity in Tesla (TSLA)ꦯ stock, a perennial favorite among retail investors, has also rebounded in recent weeks and is currently near its highest level all year. 

Ultimately, Iachini and Ma🐠ntle conclud♐e, the data suggests the Q2 retail trade slump could be over. With retail investors piling into small caps, embracing leverage, and buying large-cap dips, there’s reason to believe “the recent uptick in overall retail purchases of US financial assets may extend over the coming weeks.”