Institutional investors are taking back control of the stock market.

After years of heavy buying, retail traders seem to be stepping back. Meanwhile, data from Vanda Research indicates that despite the soaring yields on U.S. Treasury bonds, large investors have managed to maintain their stock holdings.

Vanda Global Market Strategist Viraj Patel stated in a report to clients on Friday: 'Institutional investors have shown unexpectedly strong resilience amidst this week's macroeconomic volatility.'

Data shows that the option capital flow of institutional investors is approximately three times the usual level in September.

Patel said that despite the yields on 10-year and 30-year U.S. Treasury bonds rising to their highest levels in over a decade, the inflow of capital by large funds has continued to increase over the past five trading days. He described this as a "quite constructive signal" for institutional investors' risk appetite, although this signal is overshadowed by a broader narrative of risk aversion.

Patel indicates that institutional traders are buying into some artificial intelligence-related assets during periods of volatility.

He specifically mentioned that Meta Platforms was one of the key buying targets last week. The stock price of the parent company of Facebook has risen by nearly 13% in the week since the launch of the Muse Charm device. Since Meta released its personal AI agent earlier this month, the upward momentum of this stock has been strengthening.

Patel says, "Macroeconomic uncertainty has not prevented risk-taking." On the contrary, "it has made investors more selective."

The proportion of retail transactions has declined.

In 2025, retail traders performed exceptionally well, prompting some to claim that they had shed the label of being "silly investors." Part of this was due to their decision to buy at lower prices when the market fell after U.S. President Donald Trump introduced tariff measures.

However, Goldman Sachs stated that the proportion of retail investors in S&P 500 trading volume has fallen from its peak nearly a year ago. The bank found that this proportion is currently more than 3 percentage points lower than the five-year average.

Despite the pressure from rising U.S. Treasury yields, the S&P 500 still closed higher by more than 1% last week. This increase also helped the benchmark index turn positive this month.