AAII Sentiment Survey: Investor Optimism Rises as Bears Retreat

Optimism among U.S. retail investors climbed for the fourth straight week, according to the latest American Association of Individual Investors (AAII) Sentiment Survey posted last week, suggesting growing confidence in the near-term outlook for equities.

The survey results, published before Friday’s decline in equities, showed bullish sentiment (expectations that stock prices will rise over the next six months) rose 3 percentage points to 45.9%, remaining above its historical average of 37.5% for the fourth consecutive week.

That marks the highest level of optimism since December 2024, when bullish sentiment reached 48.3%, according to AAII.

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Neutral sentiment, reflecting expectations that markets will hold steady, increased slightly to 18.5%, but continues to hover near multi-year lows. It has stayed below its historical average of 31.5% for 64 of the past 66 weeks and is now under 20% for a fourth consecutive week, the first such stretch since 2007.

Meanwhile, bearish sentiment (expectations that stock prices will decline) fell 3.5 points to 35.6%, though it remains above its long-term average of 31% for the 45th time in 47 weeks.

The bull-bear spread, which measures the difference between bullish and bearish sentiment, widened to 10.2 percentage points, climbing above its long-term average of 6.5% for the first time in 10 weeks.

In a special question, 33.5% of surveyed investors said they expect small-cap stocks to outperform over the next six months, compared with 29.2% for large caps and 17.3% for mid caps.

The latest survey results indicate persistent optimism among investors, even as market uncertainty lingers around interest rates, inflation, and economic growth.

However, given US President Trump’s latest moves regarding the threat of “massive” tariffs on China, the possibility of a decrease in market optimism has increased.