Total Issues Traded Are Declining

The total numbers of issues traded on both the NYSE and Nasdaq peaked with the stock market's peak at the end of 2021, and these numbers fell all during the bear market of 2022.  But then even though stock prices started turning up again in late 2022, the total numbers of stocks traded have continued to fall.  There are interesting reasons for that, which I will get to below.  But I should also note that in late 2024 we started seeing a brief swoop upward in Nasdaq issues traded.  That swoop has leveled off now in 2025, as the stock market is struggling with lots of bearish divergences in breadth data.

Understand that these are the daily numbers of issues traded.  A stock may be listed on the exchange but might not trade, although that happens rarely.  A stock which does not trade enough will get delisted.  So it is fair to say that the numbers of stocks traded each day pretty well approximates the numbers of listed issues. 

Those listings vary as new companies come public, or get delisted, or merge with other companies.  Sometimes a company will spin off a division to create a new issue.  Generally speaking, positive economic conditions lead to more listings and rising totals of traded stocks.  When liquidity gets tight, the marginal companies cannot survive and get either delisted or kicked down to the pink sheets (sometimes known as the OTCBB, or Over The Counter Bulletin Board).

We can see that effect more closely in the second chart, focusing on just the NYSE.  It has more stringent listing standards than the Nasdaq, which is why it has fewer total issues traded.  Back in 2012-14, QE3 was pumping money into the banking system and that was good for both stock prices and the numbers of listed issues.  When the Fed stopped QE3 in 2014, the fun was over and the stock market had much more of a struggle.

QE4 started in March 2020 in response to Covid, and the party got back in gear again.  Stock prices soared, and investment bankers took advantage of all that new liquidity by getting companies to IPO like crazy in 2020-21.  The party eventually ended, and total issues have been in decline.  The stock market averages have continued to go higher in spite of the declining number of issues traded, but they are now arguably starting to struggle in 2025.  The news of tariffs is going to add additional weight to the market's saddlebags.

So what explains the rise and fall of total issues?  The short answer is liquidity, but that is a difficult term to define.  It generally refers to how much money is there, and how much does that money want to be invested.  The Fed has a lot to do with the first factor, as we see in the next chart.

This looks at total NYSE issues versus what the Fed is doing with QE, or more recently with quantitative tightening (QT).  More money from the Fed is great for IPOs.  When they turn off that QE spigot, we see a very direct effect on the total numbers of issues traded.  We can reasonably expect, then, that as long as QT keeps on going, the decline in issues traded will continue as well.  Eventually it will all reach a point of pain, making the Fed stop its sales of T-Bonds and MBS.

At some point, we might see the Fed respond to the economically restrictive effects of tariffs (and other countries' responses to US tariffs).  The Fed might even start up doing QE again.  If so, watch for the investment bankers to gear up their road shows and start hocking new IPOs again.  Until then, it is not a great time to be an investment banker trying to generate IPO business.