Xiaomo's earnings season sentiment turned cold: US retail investors turned defensive, and the AI sector was significantly divided

The Zhitong Finance App learned that J.P. Morgan recently released the “Retail Radar” weekly retail behavior report, focusing on the 2026 Q3 earnings window, the Federal Reserve's interest rate meeting, and the black swan incident in the Brazilian election. According to the data, the overall risk appetite of individual investors in US stocks has declined markedly, trading activity has declined sharply, capital has switched from an offensive growth track to a defensive style, internal performance and capital flow in the AI industry chain have clearly diverged, and external macroeconomic events have further exacerbated market fluctuations.

The total net inflow of retail capital this week was only 3.3 billion US dollars, less than half of the 12-month average. Overall trading activity was in the historical 5% position, and ETF trading fell to a very low level of 0.4%. Investors are more inclined to trade ETF products, and individual stocks are less willing to participate. At the industry level, retail investors only maintain net purchases in the technology and communication services sectors, while other sectors such as healthcare and finance are generally sold off.

The internal structure of the technology sector changed, and capital continued to pour into semiconductors and hardware, and the software sector was reduced by capital; among the seven major tech giants, Nvidia, Google, and Tesla received additional positions from retail investors, and Microsoft and Apple showed slight net sales. It is worth noting that the net sell-off of technology stocks by retail investors for the first time this month was not a profit settlement after the market surged up; it further reflects the market's cautious attitude towards the AI market. Low volatility factor congestion in the entire market has increased significantly since June, and the characteristics of capital defense allocation have become more and more clear.

The performance of AI cloud vendors in this financial reporting season is polarized. Microsoft Azure cloud revenue surged 48% year over year, overall cloud business increased 30%, capital expenditure continued to increase, and financial reports received positive feedback from the market; on the other hand, Google's revenue and profit fell short of market expectations and plummeted 11% after the market. Although the performance of cloud business and user data was fair, high AI capital expenses heightened market concerns. SK Hynix handed over financial reports that exceeded expectations to verify the upward cycle of memory chips, but retail investors chose to take advantage of high profits; Oracle raised free cash flow guidelines to ease debt concerns, and stock prices rose sharply in the intraday period, but it also came to an end with retail profits. Amazon has yet to disclose financial reports. The agency raised its AWS growth expectations and is optimistic about the performance elasticity brought about by GPU capacity expansion and price increases.

At the macro level, the Federal Reserve kept interest rates unchanged, but the policy statement sent an eagle signal. Institutions still expect a possibility of interest rate hikes in December. The bond market is under pressure, and long-term US debt and investment-grade bond ETFs are experiencing capital outflows. Overseas markets ushered in a major black swan. The Brazilian election results deviated sharply from market expectations. The MSCI Brazil Index plummeted by about 20%. Retail investors bucked the trend and undercut Brazilian ETF and local ADR targets, and short positions quickly made up for themselves.

In the derivatives market, retail options trading remained high, and bullish options declined in the technology sector. The report also observes market credit risk through the CDS credit spread model. The credit margins of some aviation, consumer, and telecommunications companies are weakening, and they need to be wary of potential risks.

Taken together, retail investors chose to wait and see during the earnings season, and no longer blindly gamble on AI-themed markets. Although the fundamentals of the AI industry are still supported, high capital expenses, high interest rates, and differences in performance delivery have become core variables that suppress the market. In the future, it is necessary to continuously track the implementation of capital expenditure by cloud vendors, the policy trend of the Federal Reserve, and the risk of fluctuations caused by the spillover of emerging market events.