Bullish sentiment declines slightly; shows latest AAII survey

Bullish sentiment among individual investors slipped to 38% for the week ending November 5, down from 44% a week earlier, according to the latest survey [https://www.aaii.com/sentimentsurvey] from the American Association of Individual Investors (AAII).

Bearish sentiment edged lower to 36.3% from 36.9%.

Investor sentiment this week was influenced by changing views on the recent AI-driven rally and uneven market performance. U.S. stocks saw some gains as traders looked for updates on a Supreme Court ruling related to tariffs and reacted to stronger private sector job numbers. The technology sector remained in focus, with some analysts questioning whether the AI rally is becoming overvalued. There was also attention on individual stock moves, such as Cathie Wood buying Pinterest shares after the stock fell sharply.

Overseas markets showed mixed trends. Asian stocks rose at times as concerns about tech valuations eased, though trading stayed sensitive to growth and earnings news. In Europe, indexes moved in both directions as investors reviewed corporate earnings and PMI data from major economies. In Australia, a larger-than-expected trade surplus pointed to stronger exports, even as inflation pressures continued in some parts of the economy.

According to AAII, neutral sentiment, or expectations that stock prices will stay essentially unchanged over the next six months, fell to 25.8% from 19.1%, in the previous week, reflecting a more cautious tone as markets weighed recent gains against questions about the durability of the AI-led rally.

The survey has been conducted by the American Association of Individual Investors since 1987, in which it asks respondents for their thoughts on where the market is heading in the next six months.

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