The shortest bear market in history has turned into an unprecedented rally. Unperturbed by a surge in unemployment and plummeting demand, investors are piling into stocks. The S&P 500 Index is only 10 percent off its February peak, even after the massive sell-off last Thursday.

Puzzled observers have chalked it up to day traders’ driving up valuations. In the first quarter, as the coronavirus locked Americans indoors, retail-brokerage platform Robinhood added 3 million new accounts. With the baseball season indefinitely postponed, stock-trading is becoming America’s favorite pastime.

A Barclay’s research note put a wrench in that narrative on Friday. If day traders were driving the rally, you’d expect their preferred stocks to be among the best performers over the past three months. But Barclay’s analysts found that the stocks with the largest number of Robinhood holders have underperformed the market since mid-March. “This analysis is not properly causal, but to us it is compelling evidence that the rally has not been driven by retail enthusiasm at brokers like Robinhood,” the researchers noted.

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Others disagree. A Goldman Sachs note found that day traders’ choice stocks have outperformed:

The narrative of Main Street weakness vs. Wall Street asset inflation is misleading. A portfolio of stocks popular among retail investors (GSXURFAV) has surged by 61% since the bear market trough compared with a gain of 45% for both hedge fund (GSTHHVIP) and mutual fund (GSTHMFOW) favorites and a 36% rise in the S&P 500.

Neither of these reports is definitive. Barclay’s looks at the number of buyers but not at volume. Perhaps the dumbest dumb money at Robinhood is going into bad stocks while the smartest dumb money is going into good stocks. On the other hand, Goldman’s note does not attempt to draw a causal link between retail activity and valuations at all, but simply notes that stocks popular among Robinhood users have done well.

In any event, a 200 percent increase in retail activity has coincided with a rally in the flashy tech names preferred by day traders. Even before the pandemic, basement-dwelling traders were thought to be moving markets. The Reddit forum r/wallstreetbets (henceforth r/WSB) landed a Bloomberg Businessweek cover story in early February. The modus operandi of r/WSB is to pile into call options in their stock du jour — usually a tech name arbitrarily chosen by one of the forum’s regular posters. Because options sellers tend to buy the underlying stock to hedge their exposure, r/WSB posters believe that they can artificially move asset prices up. If enough guys on Reddit buy Tesla calls, options brokers have to buy Tesla, the thinking goes. Viola. Never mind that institutional investors would have an incentive to sell these overvalued equities:

Benn Eifert, chief investment officer at QVR Advisors, was initially skeptical that the money behind these online message boards could sway anything. He changed his mind. “At least from the dealers”—the middlemen—“they’ll tell you in big tech names, flows are substantial, and it’s moving things,” he says. Smaller stocks are even more sensitive to sudden bursts of attention.

Who knows? We’ll get a more methodical study someday. With multiples surging to levels not seen since the dot-com bubble, one assumes that dumb money has to be involved somehow, especially now that pesky brokerage commissions have been cut to zero. I still find it hard to believe that guys in their basements can move trillion-dollar markets, but I find many things hard to believe.