Retail investors’ appetite for stock buying cooled in August, with some positions trimmed after early-month gains and Charles Schwab’s index measuring stock holdings and trading activity falling 3.9%. According to Sina Finance, higher U.S. Treasury yields and surging energy prices helped shape the cautious tone, while Joe Mazzola, head of trading and derivatives strategy at Charles Schwab, said investors were gradually shifting funds into ETFs rather than individual stocks.
Mazzola said money was moving toward diversified ETFs, and four ETF products were among Charles Schwab clients’ top 10 net purchases. Among the 11 sectors in the S&P 500, retail investors were net buyers only of industrials, utilities, and real estate, which are typically defensive assets. On the stock side, Mazzola said SpaceX, the company founded by Elon Musk, was by far the most favored name among retail clients in August. Other major net buys included Micron Technology, Nvidia, Intel, and Alphabet, while retail investors were net sellers of other large-cap technology stocks, including Palantir Technologies, Microsoft, ServiceNow, Salesforce, and Oracle.
Charles Schwab’s 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 stock holdings and trading behavior across millions of Charles Schwab client accounts. A separate sentiment survey showed that as September began, Charles Schwab clients’ bullish sentiment toward stocks edged higher. Mazzola said clients were “defensive, but not significantly pessimistic.” Investors were most bullish on energy stocks, with Charles Schwab saying part of the reason was market attention on AI-driven energy demand.