Citadel Securities Expects Retail Investors to Return to Stocks in Q4

September saw US equities lose small investors. Now, according to Citadel Securities, which handles around 35% of those trades, those investors are expected to return.

Scott Rubner, a Citadel Securities strategist, wrote to clients on Thursday: “September was the reset. Q4 is the reload.”

The timing is tricky: the forecast comes as US job growth decelerates sharply, interest rates exceed 5%, and the majority of equities declined last month.

Small Investors Step Back from Equities

In September, retail share trading dropped to 0.94 times its average over the past year, marking the weakest level of 2026, Bloomberg reported. That represented a 26% decline from June's peak.

Over the last four years, retail trading has increased from September to October by roughly 8% on average each time.

“Citadel says its time to reload on stocks 🚨 Dear God no!!!! 😱”

— Barchart (@Barchart), October 2, 2026

Corporations are the next potential buyers. Many are barred from repurchasing shares until after earnings, and those restrictions lift on October 15.

Quantitative and model-driven funds have reduced their equity exposure to the lowest quintile since 2024.

Analysts forecast a 27% surge in S&P 500 earnings per share this quarter, and Goldman Sachs has pushed back against concerns of an earnings bubble.

Rubner told clients: “The story in 2026 has not been a low bar. Expectations have moved higher, and companies have continued to clear them by a wide margin.”

Why the Predicted Stock Reload Might Not Happen

Historical patterns are encouraging but uneven. Since 1930, the S&P 500 has posted an average fourth-quarter gain of 5.6% during midterm election years, nearly twice the typical 2.9% increase.

However, in 14 of those 23 instances, the quarter's trough occurred in October.

“A constructive Q4 setup does not necessarily mean a clean start to October.”

The economic backdrop appears more fragile. US employers added only 29,000 jobs in September, far below the expected 84,000, while the unemployment rate inched up to 4.2%.

The market gain was narrow. BeInCrypto noted that the majority of S&P 500 components declined in September, despite the index itself rising slightly.

The source of the forecast is worth noting. Citadel Securities profits from executing trades, including the retail orders it anticipates will come back.

“September took leverage and positioning out. Q4 brings earnings, catalysts, and buyers back in,” Rubner concluded.

The key date is October 15, when the first test of this prediction will occur.