A drop in some Google searches shows that retail investors are exiting the market

In this photo illustration, the stock trading graph for Tesla, Inc. viewed on a smartphone screen.

Rafael Henrique | Lightrocket | Getty Images

With the stock market well on its way to its worst year since the financial crisis, mom-and-pop investors appear to be losing interest.

Judging by online search trends, curiosity about stock prices has returned to its pre-pandemic levels, in February 2020, when the market was nearing the end of its longest bull run ever. Market-related searches peaked in mid-March 2020, when the Covid-19 pandemic and associated economic shutdowns sent investors into panic selling. It remained relatively high through the end of 2021.

But in recent days, searches for terms related to the Dow Jones Industrial Average, Apple and Tesla have moved back to the norm.

These terms are reliable proxies for retail investor interest and thus can help gauge who is really moving the market, said Nicholas Colas, co-founder of DataTrek Research.

“Americans are less aware of the stock market’s latest round of volatility than the June lows and are less interested in high-quality U.S. tech stocks than they were in late 2019,” Colas wrote in the firm’s daily market note issued Wednesday evening.

Colas added that sharp declines in prices, like what has happened through 2022, usually attract widespread attention. Concerns about the market are generally dampening consumer spending, which could help push prices down at a time when inflation is nearing its highest level in 40 years.

“This transmission mechanism only works if consumers are aware of stock prices,” he said.

As for tech stocks, the waning interest in bullish companies like Apple and Tesla “simply says that retail investors are not as engaged as they were a year or two ago. We already knew that, and that will require the markets to stabilize and begin to regroup before they return.”

Colas used the Dow as a proxy because it is much more of a Main Street indicator than the S&P 500, which is followed more closely by traders. The Dow is made up of only 30 stocks, but it is more closely followed by retail investors as it is made up of some of the largest US companies.

The waning interest in stock market watchers reflects declining retail volumes at popular online trading platforms, including Robinhood, which has cut staff as activity has slowed.

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