A key gauge of bullish sentiment on Thursday saw its biggest one-week fall since February 2023, a day after a tech-driven wipeout on Wall Street sent the Nasdaq Composite (COMP:IND) plunging close to 4%.
Bullish sentiment as per the weekly AAII investor sentiment survey slipped to 43.2% for the week ending July 24, compared to 52.7% in the prior update.
The survey has been conducted by the American Association of Individual Investors (AAII) since 1987, in which it asks respondents for their thoughts on where the market is heading in the next six months.
"Bullish sentiment among individual investors about the short-term outlook for stocks decreased in the latest AAII Sentiment Survey. Meanwhile, both neutral sentiment and pessimism increased," AAII staff said in a statement.
Wall Street has retreated 4.8% from its most recent all-time intraday high, primarily due to a rotation out of technology stocks.
"Bearish sentiment, expectations that stock prices will fall over the next six months, increased 8.3 percentage points to 31.7%. Bearish sentiment is above its historical average of 31.0% for the first time in seven weeks," AAII staff noted.
Still, despite this week's dent, bullish sentiment remains above its historical average of 37.5% for the 37th time in 38 weeks, the AAII survey showed.
"The bull-bear spread (bullish minus bearish sentiment) decreased 17.9 percentage points to 11.4%. The bull-bear spread is above its historical average of 6.5% for the 12th consecutive week," AAII said.
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