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Investor Confidence Hits Its Lowest Point in Over a Year

People investing their own money are feeling more pessimistic than they have in 16 months, as high oil costs and rising interest rates weigh on markets.

By Piggy PressSep 18, 20262 min read 2 new words

In simple terms

When everyday investors lose confidence, they tend to sell stocks and hold onto cash, which can make markets volatile and affect job growth and wages. High oil prices also mean you're likely paying more at the pump and for goods shipped across the country.

Confidence among individual investors—people buying stocks on their own rather than through large institutions—has dropped to its weakest level in over a year, according to a weekly survey by the American Association of Individual Investors. The decline comes as two major concerns pressure the economy: oil prices have stayed stubbornly high, which makes energy costs and goods more expensive, and the Federal Reserve has increased interest rates for the first time since 2023, making borrowing more expensive for businesses and everyday people.

When investors feel pessimistic, they often pull back on buying stocks, which can slow down the market and make it harder for companies to raise money for growth. This negative sentiment matters because it can become self-fulfilling—if enough people lose confidence, their selling can push prices down further, which makes everyone feel worse about the economy's prospects.

Fun fact

The Federal Reserve's last interest rate increase before this one happened in 2023—so this is the first hike in over a year, marking a shift after the Fed had been focused on cutting rates to support the economy.

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Source: Bloomberg Markets