STOCKS | Retail Investors’ Buying Appetite Cools in August as SpaceX Tops Favorites

Retail investors’ appetite for buying stocks eased in August, and they trimmed some holdings during the early-month rally. According to Sina Finance, Charles Schwab’s index measuring stock holdings and trading activity fell 3.9%. Joe Mazzola, head of trading and derivatives strategy at Charles Schwab, said investors are showing more caution as money increasingly flows into exchange-traded funds rather than individual stocks. He said funds are shifting toward diversified ETFs, and four of Charles Schwab’s top 10 net-buy names were ETF products. Among the 11 S&P 500 sectors, retail clients were net buyers only of industrials, utilities, and real estate, all of which are typically defensive assets. On the stock side, Mazzola said Elon Musk’s SpaceX was by far the most favored name among retail clients in August. Other major net buys included Micron Technology, Nvidia, Intel, and Alphabet. Among large-cap technology stocks, investors were net sellers of Palantir Technologies, Microsoft, ServiceNow, Salesforce, and Oracle. Charles Schwab said its trading activity index, STAX, fell to 57.50 in August from a four-year high of 59.80 in July. The index is calculated from the stock holdings and trading behavior of millions of Charles Schwab client accounts. A separate sentiment survey showed that as September began, Charles Schwab clients became slightly more bullish on stocks. Mazzola said clients were “defensive, but not notably pessimistic.” Charles Schwab said investors were most bullish on energy stocks, partly because the market is focused on energy demand from the AI industry.