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A trio of traders gather at a post on the floor of the New York Stock Exchange, Thursday, Sept. 9.

Richard Drew/The Associated Press

Retail investors’ appetite for U.S. stocks has fallen in the past week, data from Vanda Research showed on Wednesday, increasing the odds for a broader sell-off in the S&P 500 at a time when it is already about 2% off its record high.

In the five days to Tuesday, retail investors bought $657.7 million in U.S. equity exchange-traded funds, compared with $989.6 million and $1.39 billion in the preceding two weeks, partly due to a surge in demand for cryptocurrencies, analysts at Vanda wrote in a client note.

“Retail investors have bought every minor dip in equities this year, shielding the S&P against a double digit sell-off (but) this diminishing appetite to support the equity rally raises the odds of a larger sell-off if institutional investors continue to sell,” said Ben Onatibia, senior strategist at Vanda.

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The benchmark S&P 500 is down about 1.8% so far this month on worries about the economic hit from the Delta variant of the coronavirus and signs of a faltering economic recovery. Still, the index has doubled from its March 2020 lows and has not suffered a 10% pullback in more than a year.

In the past week, small-time traders bought up new meme stocks including Aterian Inc, IT services firm Support.com Inc and e-commerce company Vinco Ventures Inc instead of usual targets such as AMC Entertainment Holdings Inc and Clover Health Investments Corp , Onatibia said.

Shares of e-commerce company Aterian slumped 39% on Tuesday, but are still up about 54% since the close of trading on Sept. 7. Support.com and Vinco Ventures have also lost 39% and 18%, respectively, in the past five trading sessions.

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