Donald Trump’s “Liberation Day” tariff announcement has sparked one of the biggest stock market crashes of the 21st century, right behind the COVID-19 meltdown and the 2022 inflation crisis. Just six weeks ago, the U.S. stock market was at an all-time high, but now, with fears of a global recession mounting, optimism has completely vanished. The shockwaves ripping through the financial markets have shattered investor confidence.
According to data from AltIndex.com, Reddit investment sentiment has plunged to an all-time low of 0.55, confirming that the market is in bear territory.
Engagement Increases, but Investor Confidence Dips
Over the years, Reddit has become a major digital hub for stock market talk, where retail investors discuss stock picks, market trends, and trading strategies. The alternative data platform AltIndex tracks sentiment and mentions across these conversations to help investors understand where the crowd is leaning and to stay ahead of market trends. Lately, that lean has taken a sharp turn.
Although Reddit’s investment sentiment has been falling throughout 2025, the real downturn began in February when Donald Trump’s tariff policies started making headlines. The sentiment score, which ranges from 0.1 (very bearish) to 1 (very bullish), dropped to 0.62 by the end of that month. With rising concerns over potential trade wars, supply chain disruptions, and their effects on company earnings, the sentiment score continued falling in the weeks after and plunged to 0.60 by the end of March. But the real shock came last week.
Following Donald Trump’s “Liberation Day” tariff announcement, Reddit investment sentiment sank to an all-time low of only 0.55, confirming the market is deep in the bear territory. Moreover, this represents a huge drop from its December 2023 high of 0.77. For context, that December peak came during a strong market, with the S&P 500 gaining 24.89% in 2024.
The AltIndex data showed one other interesting trend- while the investor sentiment is falling, more people are joining Reddit to discuss the stock market. Statistics show the /stocks subreddit subscriber base has grown by 27% in the past year, while /wallstreetbets saw a 19% increase. This gap between engagement and sentiment shows that while more people talk about the stock market, they are becoming more cautious and pessimistic, waiting for clear signs on policy, inflation, and economic growth before making significant moves.
Tracking Alternative Data Helps Spot Market Shifts
The mix of high engagement and low sentiment among Redditors, marked by the AltIndex algorithm, shows investors are anxious, which could further fuel market volatility. If the bearish trend continues, the market could see more retail traders turning to safer sectors, taking fewer risks, or even increasing short positions.
On the other hand, if the tariff policy crisis ends, many investors are ready to jump back in, potentially fuelling a strong rebound. Either way, tracking alternative data, like Reddit investment sentiment and mentions, helps spot market signals and make the right choice at the right time.
