Live Markets-Retail investors grow more bearish as economy, inflation dominate

Individual investors grew somewhat more pessimistic about the U.S. stock market's six-month outlook this week, according to the latest American Association of Individual Investors (AAII) Sentiment Survey.

More than a third of respondents (37.5%) said the economy and/or inflation were the biggest factors influencing their six-month outlook for stocks, highlighting the continued importance of macroeconomic concerns.

Bearish sentiment, which measures expectations that stocks will fall over the next six months, rose 1.7 percentage points to 39.3%. That marked the 31st consecutive week pessimism has remained above its historical average of 31.5%.

Bullish sentiment fell 1.7 percentage points to 38.0%, while neutral sentiment was unchanged at an unusually low 22.7%, extending a 27-week stretch below its long-term average of 31%.

As a result, the bull-bear spread, a widely watched gauge of investor optimism versus pessimism, slipped to negative 1.3% from positive 2.2% a week earlier. The spread has remained below its historical average of 6.2% in 10 of the past 11 weeks, underscoring a persistently cautious mood among retail investors.

Yet the S&P 500 .SPX ended Wednesday, the final day of the survey period, just 2.1% below its August 13 record close, suggesting retail investor caution has persisted despite the market's resilience.

In this week's special question, AAII asked members which factor is having the greatest influence on their six-month outlook for stocks.