The final chapter of the bull market has begun? Retail investors return to the US stock market, with ETF inflows approaching historical highs.

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Net inflows into U.S. stock ETFs exceeded $150 billion in a single month, marking the second highest record in history. The signal of comprehensive retail investor entry has raised market caution—historical experience shows that this often indicates the current rally is entering its final stage.

The pace of retail investor return is visibly accelerating. Previously, retail investors displayed rare caution during market volatility, with their willingness to buy the dips cooling significantly; now, this prudence seems to have been cast aside.

Based on statistics from around 100 of the largest U.S. domestic stock ETFs, total inflows exceeded $150 billion in the past month, reaching the second highest level on record.

In this wave of funds, the catalytic effect of the SpaceX IPO cannot be ignored. Cathie Wood’s flagship product, ARK Innovation ETF, saw a noticeable influx of funds on the day SpaceX was listed.

Meanwhile, the AAII (American Association of Individual Investors) bullish/bearish sentiment ratio remains hovering near 12-month lows, indicating that retail investors remain verbally reserved; however, the same survey shows that actual retail stock allocations are continually rising—a divergence between words and actions worth attention.

Retail entry is often a sign of a market top

Market participants generally believe that a typical bull market follows a set progression: first, "smart money" detects the trend and positions itself; second, institutional investors enter in the following stage; finally, public investors rush in when market fervor peaks, often with little regard for valuations.

By this logic, when retail investors enter en masse, smart money is typically already exiting. The trend may accelerate upward through inertia, until buying dries up, after which a reversal inevitably occurs.

It is too soon to assert history will fully repeat itself, but analysts note that the recent performance-driven rally may signal the end of the "cognition stage," with the market possibly standing at the threshold of transition to the "mania stage."

Multiple structural risks are accumulating

At the same time, macro-level concerns are mounting. Structural pressure from oversupply in stocks and tightening liquidity continues to rise.

Additionally, market expectations regarding the direction of Federal Reserve policy may face a repricing—if the Fed, led by Waller, proves to be less dovish than anticipated, constraints on liquidity will tighten further.

Analysts warn that the resonance of these risks may prompt the once-confident "smart money" to become cautious first, leaving retail investors still in the market to bear greater volatility risks.

Risk Warning and DisclaimerThe market carries risks, and investment requires caution. This article does not constitute personal investment advice, nor does it take into account the particular investment objectives, financial situation, or needs of individual users. Users should consider whether any opinions, views, or conclusions in this article suit their specific circumstances. If you invest based on this, you do so at your own risk. ```