Retail investors have been aggressively divesting from tech stocks, leading to significant outflows from popular companies. Over the past two weeks, they sold $370 billion in single stocks, a sharp increase from $220 billion at the beginning of 2026. Last week alone saw $125 million in outflows from SanDisk, $120 million from Apple, and $105 million from Tesla. Other notable sales included $65 million from Nvidia, $40 million from American Airlines, and $22 million from Meta.
This widespread selling reflects a shift in sentiment among individual investors, particularly after a substantial rally in the technology sector, with the S&P 500 up 5% since the end of 2022. The rapid sell-off is the fastest pace of individual investor stock dumping since the COVID-19 related market crash, according to Vanda Research.
Meanwhile, South Korea is grappling with significant market volatility, with its stock market down roughly 40% in a month, erasing $2 trillion in value from the KOSPI since June's record high. Regulators are implementing caps on individual investment in single-stock leveraged funds and increasing trading costs for these ETFs, though analysts are skeptical about the effectiveness of these measures. Critics argue that the new rules do not address the scale of ETF leverage and that the cap was hastily announced without proper consideration, potentially failing to prevent further volatility. The economic downturn has led to public anger, with condolence flowers laid outside the National Assembly building in Seoul in protest against the government's handling of leveraged fund products. The situation in South Korea highlights the broader challenges stemming from market instability and leveraged trading practices.
Taiwan's stock market is also experiencing a steep correction, with the TAIEX closing below the 40,000-point threshold after a volatile session. The index has fallen by more than 6,192 points this month, marking its largest monthly point decline on record. Combined margin balances on the Taiwan stock market decreased by a record NT$52.1 billion (approximately $1.61 billion), suggesting a flush-out of leveraged selling pressure. However, a rapid V-shaped recovery is deemed unlikely, with continued volatility expected as the market seeks to form a bottom. The correction is influenced by ongoing issues such as the severe deleveraging in South Korean stocks, persistent corrections in semiconductor stocks, and geopolitical tensions.
