Corporate Insiders’ Buying Spree Signals Confidence in S&P 500 Rally: What Investors Need to Know in 2025

By: Sayan

Published on: Mar 18, 2025

Indroduction

The S&P 500’s recent rollercoaster ride has left investors scrambling for clues about the market’s next move. But one group of savvy players—corporate insiders—may be sending a bullish signal. As stocks tumbled into a brief correction in March 2025, erasing $5 trillion in value, executives and directors at major companies like Moderna (MRNA), American Express (AXP), and Marathon Petroleum (MPC) opened their wallets to buy shares. This surge in insider activity, coupled with historical buyback trends and seasonal tailwinds, suggests the worst of the selloff may be over. Here’s why Wall Street bulls are taking notice.

Why Insider Buying Matters: A Vote of Confidence from the C-Suite

• Corporate insiders—CEOs, CFOs, and board members—have unique insights into their companies’ financial health, growth prospects, and competitive landscapes. When these executives buy shares during a market downturn, it’s often interpreted as a strong vote of confidence.


• The Washington Service’s insider sentiment ratio (buyers to sellers) jumped to 0.46 in March 2025, up sharply from 0.31 in January and nearing its historical average. This marks the highest reading since June 2024, when the S&P 500 soared to record highs amid robust earnings and Federal Reserve rate-cut optimism.

Dave Mazza, CEO of Roundhill Investments, explains:

“Insider buying shows leaders believe in their businesses’ resilience despite macroeconomic noise. Unlike retail investors, these executives aren’t swayed by headlines—they’re acting on firsthand knowledge.”

Key Examples of Insider Activity

• Moderna (MRNA): CEO Stephane Bancel purchased $5 million in shares in March 2025.


• American Express (AXP): Directors bought shares during the mid-March dip.


• Marathon Petroleum (MPC): Insider acquisitions surged as energy stocks rebounded.

Buybacks Bounce Back: A $298 Billion Catalyst for Stocks

Corporate buybacks are another critical driver of equity demand. Year-to-date, companies have announced $298 billion in share repurchases—the third-highest level on record, per Birinyi Associates. Buybacks reduce share supply, boost earnings per share (EPS), and signal management’s belief that shares are undervalued.

However, March 2025 saw a slowdown, with only $21.8 billion in buyback announcements—the weakest March in seven years. Jeffrey Yale Rubin of Birinyi Associates attributes this to political uncertainty:

Historical Context: Buybacks as a Market Stabilizer

• 2023: Record $1.2 trillion in buybacks propelled the S&P 500’s 24% rally.


• 2024: Mid-year buyback acceleration aligned with the Fed’s rate cuts and economic soft landing.

Hedge Funds vs. Insiders: A Clash of Sentiment

While insiders buy, hedge funds are fleeing. Goldman Sachs reports that funds net-sold U.S. equities for 10 of 11 weeks through mid-March, driving their long/short ratio to a five-year low. This divergence highlights a tension between short-term trading and long-term conviction.

Why the Disconnect?

• Hedge Funds: Reacting to tariff fears, inflation data, and momentum shifts.


• Insiders: Focused on company-specific fundamentals and undervalued shares.

Seasonal Trends Favor the Bulls: April’s Historical Edge

Market history offers another reason for optimism. According to SentimentTrader, the S&P 500 has gained an average of 3.9% between the 49th and 75th trading days of the year (March 14 to April 22 in 2025), with a 70% success rate since 1953.

Why Seasonality Matters in 2025

• Post-Correction Rebounds: March’s dip mirrors 2020 and 2022 patterns, where markets rallied sharply after corrections.


• Earnings Catalyst: Q1 2025 reports (due in April) could reignite momentum if results exceed lowered expectations.

The Risks: Tariffs, Inflation, and Geopolitics

• Trump’s Tariff Deadline (April 2): New trade barriers could disrupt supply chains and corporate margins.


• Delayed Fed Cuts: Sticky inflation may postpone rate reductions, pressuring valuations.


• Global Instability: Escalating conflicts in Europe and Asia threaten commodity prices.

Bottom Line: Insiders’ Actions vs. Macro Fears

The insider buying surge, combined with buyback potential and seasonal trends, suggests the S&P 500’s March correction was a buying opportunity—not a prolonged downturn. For investors, tracking SEC filings (Form 4) for insider activity and monitoring buyback announcements could provide an edge.

S&P 500 (^GSPC) Outlook:

• 6-12 Month Target: 6,000 (+6% from current 5,675).


• Key Levels: Support at 5,400; Resistance at 5,800.

As markets navigate turbulence, following the lead of those who know their companies best might be the wisest move.