NDR: All eyes on optimism

After tariff-driven pessimism in early April, sentiment rebounded with the market. The NDR Daily Trading Sentiment Composite jumped from 4.4 on April 8 to excessive optimism by May 14. Still, conviction was weak: the index didn’t remain in the optimism zone for consecutive days until July 1, and July’s peak of 71.1 was well below levels typical of major market tops. 

The intermediate-term NDR Crowd Sentiment Poll showed similar caution (chart above). It only reached optimism on June 27, peaking at 68.8 on July 3. Even after 18 S&P 500 record highs since then, both sentiment measures have hovered between high neutral and low optimism.

Investors remain wary of unresolved tariffs, Fed policy debates, doubts about labor data, and whether strong Q2 earnings reflect lasting strength. Historically, sentiment often requires multiple waves of optimism to build momentum. If seasonal volatility gives way to new highs, a tougher sentiment backdrop could emerge late this year or in early 2026.

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