Aside from tech stocks, what other main themes are retail investors in the US stock market speculating on?

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As the US stock market faces key geopolitical events, the main trading themes of retail investors are undergoing significant shifts.

On May 14, according to ChaseWind Trading Desk, the latest report from JP Morgan shows that while retail investors continue to favor semiconductor assets, funds are rapidly flowing out of the software sector and shifting heavily towards copper mining ETFs and “meme” stocks that are heavily shorted by hedge funds.

As market wait-and-see sentiment rises, the overall retail buying volume has fallen below the average over the past 12 months. However, against the backdrop of declining overall trading activity, copper mining assets have emerged unexpectedly. Driven by rebounding demand in China, fundamentals boosted by artificial intelligence, and compounded risks in Middle Eastern sulfur supply, retail single-day purchases of copper mining ETFs have hit recent highs, triggering significant market volatility.

At the same time, competition between retail investors and institutions on some heavily shorted stocks is intensifying again. Retail investors are continuously buying into targets hyped on social media and heavily shorted by hedge funds, and such contrarian activity has significantly increased the short-term trading popularity of these stocks, driving potential short squeeze risks.

Copper Mining Assets Emerge, Defensive Allocations Increase

JP Morgan data show that last week, net retail inflows were $6.4 billion, slightly below the 12-month average of $6.6 billion, and investors continue to favor ETFs ($5.5 billion net inflow) over individual stocks.

As overall trading volume in tech-related ETFs declines, capital attention is turning significantly to the copper mining sector. Thanks to the recovery in Chinese demand, AI industry’s strong demand for copper, and supply chain risks associated with Middle Eastern sulfur, retail investors are quickly trading around this theme.

On Tuesday, single-day retail purchases of copper mining ETFs (COPX) reached an extreme (+6.7z), and profits were quickly taken on Wednesday (-3.4z). In addition, multi-sector fixed income ETFs, dividend-style ETFs, and international equity ETFs (EAFE) also saw significant inflows from retail investors, reflecting a rise in demand for defensive allocations ahead of major geopolitical events.

Targeting Highly Shorted Stocks, “Meme” Stock Battles Rekindled

Outside the main tech trades, aided by social media, retail investors are regrouping in highly shorted “meme” stocks, engaging in fierce battles with hedge funds.

JP Morgan points out that retail investors are continuously buying stocks with relatively high short interest. For example, after obtaining exclusive control over Kenvue Inc. with approval from India's Competition Commission, KMB saw $5.4 million in net retail buying last week, while the stock’s short interest has increased by 5% since January 2026.

Similarly, KLAR, after announcing flexible payment option integration into Google’s Gemini app, attracted around $53 million in net retail purchases despite its stock falling about 50% this year, with shorts climbing from 9% to 17% over the same period.

Additionally, RIVN, which launched an AI voice assistant, has also seen continued retail buying, with short positions currently elevated at 19%. This opposition between retail purchases and institutional shorting is continuously accumulating potential short squeeze risks.

Divergence Within Tech: Selling Software Giants, Betting on Semiconductors

Despite retail investors seeking new themes beyond tech stocks, big capital shifts within the tech sector itself are also directly impacting the market.

This month, retail investors have broken with past patterns and begun to sharply reduce exposure to software stocks. Microsoft, the second most bought stock in April, became the second most sold stock to date in May, with a net sell-off of $117 million last week.

In stark contrast, retail investors continue to add to their positions in the semiconductor sector, with ETFs like SOXX and SMH seeing continuous inflows. Purchases of DRAM more than quadrupled last week and remain strong.

JP Morgan’s crowding analysis shows the semiconductor sector crowding is at a historic high of 99.3%, while software sector crowding is only at 22.8%.

It is notable that short interest is continuously accumulating in the software sector, with the short squeeze risk indicator hitting an extreme value of 100%, while short positions in semiconductors remain stable and at low levels.

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The above highlights are from ChaseWind Trading Desk.

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