(Bloomberg) -- Animal spirits are raging again among retail investors and topping the meme frenzy seen exactly two years ago — at least by one measure.

Unbowed by losses of more than 50% in their favorite stocks last year, individual traders are storming back to stocks like Carvana Co. and crypto-related products as the market staged a rebound that added almost $2 trillion to equity values in January alone. 

With professional investors mostly staying on the sidelines, the foray is boosting retail’s market presence. Trading orders from the retail army in stocks and exchange-traded funds accounted for 23% of the market’s total volume in late January, above the previous high of 22% reached during the 2021 meme mania, according to JPMorgan Chase & Co. estimates derived from public data on exchanges. 

“They are encouraged by the recent rebound in small-cap meme stocks and cryptoassets which crashed last year,” Peng Cheng, a JPMorgan strategist, said in an interview. “Trading volume is overall lower and that also may have exaggerated retail market share.”  

Optimism that the finish line in the Federal Reserve’s rate-hiking cycle is in sight has emboldened bulls across assets, but day traders have been particularly active in riding the wave. They’ve fueled a 261% jump in the debt-strapped used-car retailer Carvana and sent Wayfair Inc. doubling this year. Electric-carmaker Lucid Group Inc. jumped 65% last week alone.

Familiar retail-trading favorites, like Bed Bath & Beyond Inc., AMC Entertainment Holdings Inc., and DraftKings Inc., are once again being hyped on social media platforms.  

The 2021 meme-stock frenzy — where the day-trader crowd upended the stock market and schooled some of the seasoned pros — didn’t end well after last year’s bear market, with retail traders losing all of the money made in the meme-stock rush. 

Those losses are no hindrance to a resurgence in gambling spirits, as long as the trend is back in favor. The Roundhill MEME ETF (ticker MEME), debuted in 2021, has advanced roughly 40% this year, compared with a nearly 9% gain in the S&P 500.

Stocks extended gains Thursday after Fed Chair Jerome Powell didn’t seem particularly bothered by the January rally in markets. When asked at Wednesday’s press conference whether he was worried about the advance creating easier financial conditions that could hamper his inflation fight, he said “our focus is not on short-term moves, but on sustained changes.” 

The MEME ETF jumped more than 7% as of 11:07 a.m. in New York, while a basket of unprofitable tech stocks surged as much as 7.2%. 

Powell “simply provided a green light for the speculation to continue,” said Michael O’Rourke, chief market strategist at Jonestrading. But that may sow seeds for trouble down the road, he added. “Just because the Chairman of the Federal Reserve has blessed a speculative frenzy, it does not mean it will help the deteriorating fundamentals companies are facing.”

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