Retail Investor Behavior Shifts Amid Iran Conflict
Since the onset of the conflict in Iran one month ago, retail investors have drastically altered their trading behavior. Research from JPMorgan Chase indicates a 30% plunge in retail trading activity for the week of March 12, with average retail flows dropping to $3 billion, significantly below the 12-month average of $6.8 billion. Vanda Research also noted that retail investors were net sellers of stocks on March 23, marking the first such occurrence since November 2023.
In the week following the war’s start, the S&P 500 and Nasdaq Composite experienced declines of approximately 4%. Concerns about the long-term economic ramifications of the conflict are contributing to this cautious approach among individual investors. Interest rate traders are also adapting their outlook; as of December 2026, 64% expect rates to remain between 3.5% and 3.75%, with 31% projecting even higher rates.
