After months of sitting on the sidelines during early-year market turbulence, individual investors are cautiously stepping back in.
The Schwab Trading Activity Index (STAX), which tracks the behavior of Schwab’s self-directed clients, edged higher for the second straight month in July. The index climbed 3% to 41.79, “staying low in the historic range,” Schwab said.
In June, STAX rose 2.47% to 40.66, snapping three consecutive months of declines. But despite the gains, it remains well below its February peak of 51.94.
Nvidia makes a comeback
Information technology remained the most net-sold sector for the sixth straight month, followed by financials and communication services.
But one big tech name saw a major shift. After retail investors sold Nvidia (NVDA) in May and June — despite its AI-driven surge — they flipped back to buying in July, making it the highest net-buy stock of the month.
Meanwhile, Apple (AAPL) swapped places with Nvidia as the most heavily net-sold stock. The move follows criticism over Apple’s perceived lag in AI development and mounting questions over CEO Tim Cook’s leadership.
Sector rotation and surprising buys
Communications services topped the net-buy list in July, followed by health care and financials. Traditional defensive plays — consumer staples, energy, real estate, and utilities — were all net-sold.
“Client trading activity continues to reflect measured bullish sentiment,” said Joe Mazzola, strategist at Schwab. “When we consider stock and option trading activity alongside margin balances, we see clients are becoming more confident in the market, but not to the point of excess.”
Mazzola added that aggressive upside call buying in tech — a hallmark of last summer’s retail surge — “has not yet materialized.”
One standout trade was UnitedHealth (UNH). Shares were high on STAX’s net-buy list for most of July, despite regulatory and operational headwinds.
But UNH stock plunged late in the month after the company disclosed a Justice Department probe into its Medicare Advantage practices, “perhaps ultimately disappointing those who took a chance” buying the dip, Schwab noted.
Tesla (TSLA) ranked as the second-highest net buy, followed by Palantir (PLTR).
And while July saw a resurgence of the meme-stock rally, none of the popular names made a significant appearance in Schwab’s latest report.
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