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INVESTORS TURNED CAUTIOUS IN APRIL: SCHWAB

Charles Schwab reported this week that its Schwab Trading Activity Index (STAX) - a behavior-based index that analyzes retail investor stock positions and trading activity from millions of client accounts - fell to 50.10 in April from 56.04 in March.

Joe Mazzola, head trading and derivatives strategist at Charles Schwab, said the second consecutive month-over-month decline in the STAX score, which also fell by the biggest margin in a year, suggested that retail clients turned more cautious in April.

“Each April, we tend to see clients selling in advance of Tax Day and reinvesting afterward. This year, though, we also observed a meaningful rotation out of higher-beta individual holdings and into broad-based lower-beta ETFs, which not only led to a drop in the score but appears to indicate a meaningful dip in sentiment,” said Mazzola.

Schwab clients were net sellers in 9 of the 11 major S&P 500 .SPX industry sectors, buying only the defensive consumer staples .SPLRCS and utilities .SPLRCU sectors. Net selling was heaviest in technology .SPLRCT followed by consumer discretionary .SPLRCD, then financials .SPSY and energy .SPNY, the firm said.

And many of their clients shifted toward diversified exchange-traded funds (ETFs) in April with five of the month’s 10 most net-bought names being ETFs.

Then from a demographic perspective, market exposure fell across all age groups in April, according to Schwab, with Generation X (1965-1980) maintaining the highest exposure to markets, followed by Baby Boomers (1946-1964), Millennials (1981-1996) and finally Generation Z (1997-2012), which hit exposure lows last seen in September 2025. Sentiment also appeared to fall most among the most active traders, whose exposure hit the lowest levels since December.

Still, they note that the major indexes rebounded during the month with a ceasefire announcement easing concerns even despite high oil prices. They also highlighted a rally in the PHLX Semiconductor Index .SOX, which rose 47% in the period with an 18-session advance.

In April stocks bought by all Schwab clients included Microsoft MSFT.O, Tesla TSLA.O, Palantir PLTR.O, Micron Technology MU.O and Netflix NFLX.O. But on the flip-side stocks sold by clients included Nvidia NVDA.O, Amazon.com AMZN.O, Advanced Micro Devices AMD.O, Intel Corp INTC.O and Broadcom AVGO.O.

(Sinéad Carew)

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