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S&P 500’s 5% Rout Hammers Mom-and-Pop Investors Who’ve Piled In

  • Retail money has scored big win with bets like Virgin Galactic
  • Now their favored stocks such as Tesla, Plug Power are sinking
RF markets
Photographer: Towfiqu/Moment via Getty Images

If the source of any of the resilience in U.S. stocks this year has been retail investors fired up by zero-commission trading, markets are about to find out how sturdy that money is.

The sell-off stands as the first major test for mom-and-pop investors who, emboldened by a brokerage price-war, have effectively doubled their trades in equities over the last several months. The surge in interest from a group notoriously known for chasing winners has helped fuel a rally in stocks from tech giants to small-caps.