Optimistic individual investors are helping shape the market, Jim Cramer says

• CNBC's Jim Cramer on Tuesday suggested individual investors are helping to drive market action, saying they are more optimistic than institutional investors.
• “The individual investor has not lost faith,” he said. “They've practically propelled us the whole way from the post Liberation Day lows.”

CNBC's Jim Cramer on Tuesday suggested individual investors are helping to drive market action, saying they are more optimistic than institutional investors.

“The individual investor has not lost faith,” he said. “They've practically propelled us the whole way from the post Liberation Day lows.”

Cramer referenced recent data from Bank of America analysts that said Wall Street has just seen its biggest week of selling in almost a year. The selling was led by institutional clients, the report said, and corporate buybacks slowed to their lowest weekly level since 2023. The report also indicated that private clients have been doing more buying, even as stocks headed higher.

While Cramer acknowledged that the Bank of America report is just one piece of research, he said the company probably has the “best cross-section of people to examine.” According to Cramer, individual buying has helped the market go up even as institutions offload shares and Wall Street worries about new tariffs and global trade.

Individual investors believe that stocks represent long-term value, Cramer said, and he suggested they aren't afraid the Trump administration will somehow tank the economy. He also said they want to use the market as a way to save, rather than trade in and out.

This attitude is markedly different than that of institutional sellers, Cramer said, and the difference is “only going to get more pronounced.” He suggested that institutional sellers are worried about Donald Trump's new tariff policies and megabill, and they believe that his inconsistency makes it risky to own stocks.

Institutions can be too cynical and concerned with the near-term, Cramer asserted. While they're focused on the actions of the Federal Reserve, individual investors are paying attention to individual companies' actions, he said.

“Look, there's nothing wrong with the short-term trading the institutions are doing,” he said. “But let me give you the bottom line – when I first walked down Wall Street…the Dow Jones Industrial Average stood at about 1,000. Now it's at 44,000. Perhaps the weight of evidence says you should just keep buying and just stick with it. It's been right for decades, why should the individuals stop now?”