Once called "dumb money," everyday investors — people trading via Robinhood, Schwab and the like — are now collectively big enough to have sway over the direction of markets.

Why it matters: That power can come with real risks for this herd of retail investors and potentially for the economy if they pile into an investment that goes terribly wrong.

State of play: Investments are taking on an increasingly bigger share of the wealth picture for everyday Americans, according to the JPMorgan Chase Institute.

• Retail investing makes up about a quarter of daily trading volume on average, according to Jefferies.
• Young people are also increasingly viewing investing as a source of income, according to a survey from the Oliver Wyman Forum.

Zoom in: Retail has enough buying power to reshape entire asset classes, which recently played out as investors rapidly bid up the price of silver.

• Amid a parabolic rise in silver prices last week, the precious metal became the second-most-popular trade on the Interactive Brokers platform, which is used by many retail investors.
• Then, silver crashed, falling 40% from its prior highs.
• "I lost a year's worth of post-tax salary today on my entire portfolio," one Reddit user posted about the crash, according to the Financial Times.

Yes, but: Silver rallied 8% yesterday, in an example of the retail investors' favorite trade: buying the dip, or piling into an asset when the price drops.

• It's a trade that has worked for the group: The S&P 500 has recovered from every dip it's ever had, though the time horizon for that recovery can vary widely, and retail is often buying dips on single stocks or other assets.
• The risk of buying the dip is that it works until it doesn't. Many younger retail investors have never lived through a long market slump, in part because recent recoveries have been unusually fast, helped along by their own buying.

Zoom out: If these investors experience a prolonged downturn, they could pull their money out of the market.

• It's an "unknown risk," George Eckerd, research director at the JPMorgan Chase Institute, tells Axios, adding that the group would lose interest in buying the dip if it lasted too long.
• That alone could make a market fall deeper: Morgan Stanley's latest retail investor pulse survey signaled a reliance on retail investors to continue putting a floor under U.S. stocks.

Threat level: It's not just investors who would be hurt. The "wealth effect" created by rising asset values, making people feel richer, is supporting consumer spending, the primary driver of economic growth.

• If the market tumbles, that could stifle consumer spending for this group, putting further pressure on companies and the stock market, and pressuring the broader economy.
• Follow the money: Retail investors are also using a larger share of their investments as a form of income than they have at any point, according to data going back to the 1980s from BCA Research.
• If retail is relying on stocks climbing for income, they may be more keen to sell if they're worried a downturn will last for longer than they're used to.

The bottom line: The democratization of finance has given young people and everyday investors a real crack at wealth building.

• But without experiencing a downturn for themselves, it's hard to know how they'll react.

Software stocks are getting dumped as investors price in a world where AI could replace software services.

Why it matters: The software selloff dragged down the broader market yesterday — it's the first example of how the market will respond when presented with evidence that AI could disrupt or even replace an entire industry.

Driving the news: Software stocks slid after Anthropic rolled out new AI automation capabilities for several sectors of enterprises.

• Selling started in legal software/data-adjacent names, including Experian, the London Stock Exchange Group, Thomson Reuters and LegalZoom, then broadened across the sector.
• The iShares Expanded Tech-Software Sector ETF (IGV) is down more than 14% over the past six sessions, following a 15% drop in January (its worst month since 2008).

What they're saying: Software sentiment is the "worst ever," according to a note from Jefferies.

• It's "radioactive," Anurag Rana of Bloomberg Intelligence tells Axios.
• While AI is disrupting the sector, there is still an acknowledgment that there could be winners and losers.
• But it's not clear who will survive, so investors are getting out.

Between the lines: Anthropic sees itself as a complement rather than as a competitor to software providers.

• Anthropic is able to securely connect with other tools and applications, meaning it can be your "homepage" of sorts while you interact with any number of software services running through the back end.
• Claude can "render interfaces directly within it," so it could theoretically "drive even more engagement and interactivity... with all these other business systems," Scott White, head of product for enterprise at Anthropic, tells Axios.

Threat level: AI could, of course, replace those software services entirely at some point.

• "Our concern is that the seat-compression and vibe coding narratives could set a ceiling on multiples," Billy Fitzsimmons, analyst at Piper Sandler, wrote in a note.

Reality check: It's not the first time Wall Street has turned sour on software.

• Mobile was once set to threaten Microsoft's software business as everyone was going to be spending time on phones, not desktops.
• Microsoft's stock is up 789% over the last decade, so it clearly survived.
• This "happens a lot" within software, and there's not much companies can do to fix it, Bloomberg Intelligence's Rana says.

What we're watching: How long the software-apocalypse lasts.

• What's the proper valuation for software companies with business models that could be severely impacted by AI?

Stocks of companies expecting revenue from OpenAI are under pressure, as Wall Street is getting increasingly skeptical about the AI company's ability to make money.

Why it matters: Since OpenAI isn't public, watching the stocks of public companies it has financial agreements with is one way of sussing out Wall Street's temperature on the company.