If you’ve noticed that your Tesla-loving, Robinhood-obsessed friend is lacking the usual pep in their step, they’re not alone.

Amid conflict in the Middle East and fears of potential stagflation, retail traders are stepping back and taking an uncharacteristically reserved approach to the market. Or in other words: Nobody is buying the dip.

“For the first time this year, retail investors are showing persistent signs of weakness, with weekly purchases decelerating by ~30% after defying seasonal patterns,” Arun Jain, JPMorgan’s head of US equity quant strategy, wrote in a note yesterday.

Monday marked the largest net-selling day in single stocks in a month, Jain and the team noted. While purchases ticked up to a net positive by Tuesday and Wednesday, their pace was still below the year to date average. According to JPMorgan, retail traders have been shaken by geopolitical instability caused by the war with Iran, as well as AI-anxiety that’s rattled both equity and credit markets.

Zoom out: Since 2020, retail investor enthusiasm has been a sort of shock absorber for market declines. Retail participation has steadily climbed since the meme stock heyday of 2021, and in 2025 they accounted for 20% to 25% of total investing activity for the entire year—peaking at 35% in April, when they bought the Liberation Day dip en masse and buoyed the market to new heights.

But if optimism and enthusiasm are waning among usually rabid equity investors, stocks could lose an important pillar of support, and a downturn spurred by the conflict in Iran could become protracted.

What AI bubble?

Despite the fact that uncertainty often drives traders into defensive sectors, that hasn’t been the case this time. Instead, the retail traders who are still buying are focusing on AI stocks.

While fears of AI destabilizing the entire economy or missing expectations and causing a market collapse are still rampant, the retail crowd isn’t ready to give up on AI just yet. Instead, they’re selling energy stocks as oil prices surge.

Specifically, retail traders bought names like Nvidia, Microsoft, and Tesla, while some of the steepest outflows were from Exxon, as well as State Street Energy Select Sector SPDR ETF.

Retail traders might be worried, but it seems their love affair with the AI trade can’t be extinguished that easily.—LB

🟢 What’s up

• Lennar rose 2.62% despite reporting first-quarter earnings, revenue, and home deliveries that all missed analyst expectations.
• Klarna jumped 8.75% after board chair Michael Moritz purchased $50 million worth of the fintech company’s stock.
• AdaptHealth gained 8.67% as shareholder Richard Cashin’s One Equity Partners disclosed buying 2 million shares, valued near $20 million.
• Strategy gained 1.7%, Coinbase popped 1.18%, and MARA Holdings climbed 6.39% alongside gains in bitcoin.
• Micron advanced 5.13% after Wedbush reiterated an Outperform rating and raised its price target to $500 from $320 ahead of next week’s earnings report.

What’s down

• Ulta Beauty fell 14.24% as earnings per share missed Wall Street expectations despite revenue topping forecasts.
• Fertilizer producers Intrepid Potash dropped 7.33%, Mosaic slid 6.54%, and CF Industries tumbled 4.73%, giving back gains from shipping disruptions in the Strait of Hormuz.
• Once Upon a Farm slid 7.46% after the Jennifer Garner-backed baby food company reported its first earnings since its February IPO and missed guidance expectations.
• Insulet declined 6.88% following a voluntary recall of some Omnipod 5 insulin pods linked to a tubing defect that could prevent patients from receiving the intended dosage.
• EverCommerce sank 16.6% after the SaaS company issued soft first-quarter guidance.
• ServiceTitan tumbled 6.41% as fourth-quarter results and forward guidance came in mixed.

Like a game of financial whack-a-mole, every time concerns around private credit seem to fade, another problem pops up somewhere else.

Two days ago, Cliffwater’s flagship private credit fund was hit with redemption requests equal to 14% of its assets, but was only able to meet half of them. Around the same time, JPMorgan marked down loans in one of its private credit vehicles, raising the possibility that peers may follow suit.

That’s exactly what happened: Yesterday, Morgan Stanley disclosed that its $8 billion private income fund received redemption requests of 10.9%, but will limit withdrawals to 5%. Deutsche Bank also rattled investors after revealing roughly $30 billion in exposure to private credit, making the bank one of the most vulnerable to the private credit industry’s recent woes.

For a while now, banks have increasingly lent to private credit firms in search of higher returns. Because these loans are typically backed by pools of underlying loans, banks can hold less regulatory capital against them, boosting returns on equity compared with traditional corporate lending. As a result, bank lending to nonbank financial institutions has surged to $1.9 trillion, up from $1.1 trillion three years ago.

But that model only works if credit conditions remain stable, and right now risks are growing. Concerns about borrower valuations are rising, and many funds rely heavily on retail investors, who tend to withdraw quickly when sentiment sours. At the same time, surging oil prices risk reigniting inflation, which could lead to higher interest rates, which in turn raises borrowing costs and increases default risks.

Banks say they’re well positioned to tackle rising risks, but investors might want to proceed with caution—because just like when your girlfriend says “I’m fine,” there’s usually more to the story.—SY

With all eyes on the state of the AI trade, it’s hard not to wince when companies scrambling to catch up stumble and fall flat.

Take Meta Platforms

The social media giant’s much-hyped foundational AI model, codenamed Avocado, was supposed to make its debut this month. But it’s been delayed until at least May after internal tests for Avocado’s coding, reasoning, and writing skills fell short of all three of its arch rivals: Google Gemini, Anthropic’s Claude, and OpenAI’s ChatGPT.

It’s a mortifying setback, especially since Meta’s last AI model, Llama 4, also underwhelmed last year. Yet Meta has pressed ahead with its AI endeavors anyway, nearly doubling capital spending from $72 billion in 2025 to $135 billion in 2026. CEO Mark Zuckerberg also appointed 29-year-old Alexander Wang as Meta’s new chief AI officer, who whipped up an elite task force called TBD Lab to work on Avocado, as well as another fruit-themed model for video and images called Mango.

The team’s lack of progress has made shareholders wonder why Zuckerberg is spending so much cash to keep up with the competition. In fact, Zuck may soon be handing money to the very companies he’s trying to beat: The New York Times reported yesterday that Meta may temporarily license Alphabet’s Gemini to power its AI products, which would simultaneously embarrass Meta while underscoring Alphabet’s lead in the AI race.

Investors aren’t exactly thrilled about these developments: shares of Meta are down around 7.03% in 2026, including a 3.83% decline today.

Meanwhile, over at Adobe

AI has thrown software companies into an existential crisis: Will it make them obsolete? The latest casualty is Adobe, which reported better-than-expected fiscal first-quarter earnings only to have the news upstaged by longtime CEO Shantanu Narayen’s announcement that he plans to step down once a more AI-savvy successor is found.

Shares have soared 540% in Narayen’s 18 years at the company—far outpacing the S&P’s 351% gains—but investors now fear that generative AI could make it easier to create visual media without Photoshop and other pricey Adobe tools. That has sent shares plummeting 28.76% this year, including 7.58% today.

In an effort to stay in the game, Adobe has integrated third-party AI into certain products like Photoshop and Premiere Pro, and launched its own AI tool, Firefly. This has helped triple Adobe’s AI-first annualized recurring revenue (ARR) year over year to $26.06 billion. Still, some say it’s too little too late, and that fresh leadership is what it’ll take to get up to speed.

Bottom line: The race for AI dominance is far from over, and things in tech can change fast. Alphabet was once the biggest loser, now it’s growing more dominant—and while Meta and Adobe are in the doghouse for now, who knows what tomorrow will bring.—JD

• Uh-oh: Bank of America strategist Michael Hartnett just compared today’s market to 2008.
• A federal judge threw out two Justice Department subpoenas against the Federal Reserve, handing Jerome Powell a big win.
• Take a look at how Buzzfeed went from $1.7 billion media giant to the edge of bankruptcy like so many other entertainment sites before it.
• Cuba’s government confirmed it is in talks with US officials as President Trump continues to wager an economic pressure campaign.
• Elon Musk admitted his generative AI startup, xAI, “was not built right.”
• Big companies like Amazon and Airbnb are selling bonds big-time.
• Members of the Starbucks union lowered their proposed wage floor to $17 amid stalled contract negotiations.

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Monday: We’ll kick things off focused on the manufacturing industry, with the industrial production and capacity utilization report, as well as the Empire State manufacturing survey. Earnings are few and far between, with just Dollar Tree and Semtech worth watching.

Tuesday: Earnings pick up the pace a bit, with Oklo, Lululemon, and Docusign leading the charge. We’ll keep tabs on the housing market with a look at the home builder confidence index for March, as well as the pending home sales report for February. It’s also St. Patrick’s Day, and the first day of March Madness!

Wednesday: The biggest report of the week arrives in the form of February PPI, but all eyes will be on the Federal Reserve, which is due to make its latest interest rate decision. Earnings include General Mills, Macy’s, Williams-Sonoma, Micron, Five Below, and Jabil.

Thursday: Housing market readings continue with the report on new home sales for January, plus we’ve got the usual weekly initial jobless claims report. FedEx, Alibaba, Intuitive Machines, and Darden Restaurants headline the earnings mix.

Friday: Nothing much happening today, so consider getting an early start on the weekend!