A street sign for Wall Street is seen in the financial district of New York, U.S., November 8, 2021. REUTERS/Brendan McDermid

Join now for FREE unlimited access to Reuters.com

Register

NEW YORK, Feb 25 (Reuters) – U.S. retail investors bought stocks in Thursday’s selloff, even as many of their favorite names were battered by concerns over geopolitical disputes and a hawkish Federal Reserve which should keep volatility high.

Individual traders bought a net $1.5 billion on Thursday as the S&P 500 extended declines to an intraday loss of nearly 14% on the year on concerns over the invasion from Ukraine by Russia before climbing later in the day, according to data from Vanda. Research.

“We believe retail investors played a key role in yesterday’s strong rally in equities,” Giacomo Pierantoni, chief data officer at Vanda Research, said in a note. The benchmark rose 2.24% on Friday, trimming its year-to-date losses to 8%.

Join now for FREE unlimited access to Reuters.com

Register

Earlier data showed purchases by retail investors declined over the past week, with flows falling 50% to $1.8 billion in the week to Wednesday, according to JPMorgan.

The S&P 500’s year-to-date decline and Nasdaq’s 12.5% ​​decline have masked much larger declines in many of the stocks and ETFs that retail traders have favored in recent months.

Analysts said the crisis in Ukraine is likely to keep volatility high as investors digest the implications of the biggest attack on a state in Europe since World War II.

“This is one more volatility-inducing event on a background that already offers plenty of volatility opportunities,” said Steve Sosnick, chief strategist at Interactive Brokers (IBKR.O).

As of Thursday, the most popular stocks among Interactive Brokers clients, on a five-day moving average, include many names that have been beaten in the market this year.

The most active names with net purchases include Tesla Inc (TSLA.O), down 23.4% year-to-date; Advanced Micro Devices Inc (AMD.O), down 15.9% year-to-date; Meta Platforms Inc (FB.O), down 37.4% year-to-date; and Roku Inc (ROKU.O), down 38.8% year-to-date, among others.

With many retail investors’ favorites in the red in 2022, the average bettor’s portfolio is also poised to plunge into the negative, Vanda analysts said in a separate note.

As Russia’s aggression towards Ukraine has intensified, retail investors have also focused on potential winners and losers from the crisis.

Areas of retail trader interest were the United States Oil Fund LP ETF, which last week saw the second-highest weekly net buying flow by retail investors since April-May 2020, as well as energy stocks, VIX ETFs and gold ETFs, they mentioned.

The top pick among retail investors over the past week, as tracked by JPMorgan, was ProShares UltraPro Short QQQ ETF (SQQQ.O), which bets against the Nasdaq 100 index and is up 38.6% since the beginning of the year.

Join now for FREE unlimited access to Reuters.com

Register

Reporting by John McCrank in New York Additional reporting by Medha Singh in Bengaluru Editing by Ira Iosebashvili and Matthew Lewis

Our standards: The Thomson Reuters Trust Principles.