economy
March 2, 2026
Retail investors had two favorite trades during Monday's market turmoil
Mom-and-pop investors rushed into a pair of trades following the strikes on Iran.
TL;DR
- Retail investors net bought significant amounts into the State Street Energy Select Sector SPDR ETF (XLE) and Palantir on Monday.
- These trades are seen as selective repositioning in response to U.S.-Israeli strikes on Iran and potential long-term global conflict.
- The XLE ETF reached a 52-week high, with oil prices climbing due to conflict concerns, marking oil as a preferred geopolitical hedge.
- Palantir surged, reframed from a software growth name to defense exposure, leading the broader defense sector higher.
- Retail investors reduced exposure to higher-risk technology names like Nvidia, indicating a pullback amid uncertainty.
- The overall market did not see the same support from small traders, who are targeting specific themes instead of broad index exposure.
- Demand for Treasury bond ETFs and inverse QQQ ETFs suggests retail traders are actively hedging and getting defensive.
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