Schwab Trading Activity Index vs. S&P 500 (Graphic: Charles Schwab)
Schwab Trading Activity Index April 2025 (Graphic: Charles Schwab)
Schwab clients were sellers of equities in April; Net selling was highest in the Information Technology, Consumer Staples, and Consumer Discretionary sectors
WESTLAKE, Texas, May 05, 2025--(BUSINESS WIRE)--The Schwab Trading Activity Index™ (STAX) decreased to 41.18 in April, down from its score of 48.36 in March. The only index of its kind, the STAX is a proprietary, behavior-based index that analyzes retail investor stock positions and trading activity from Schwab’s millions of client accounts to illuminate what investors were actually doing and how they were positioned in the markets each month.
The reading for the four-week period ending April 25, 2025, ranks "low" compared to historic averages.
"Volatility was a huge story this month as the STAX fell to its lowest level in two years as Schwab clients were net sellers on a dollar basis of every S&P 500 sector except energy," said Joe Mazzola, Head Trading & Derivatives Strategist at Charles Schwab. "Clients shied from individual stocks during April even as the S&P 500 and Nasdaq Composite boomeranged double digits from the April lows. As would be expected given the continued volatility in the markets, we saw a broad pattern of clients rotating out of equities and gravitating towards fixed income and broad-based ETFs as potentially lower-risk alternatives to individual names, using the spike in volatility not to run away from the market but to optimize their trading strategies with the opportunity afforded them."
Amidst tariff policy announcements on April 2, stocks briefly went down to 13-month lows before the market made a dramatic comeback to recover much of those losses amid optimism for trade deal progression, Q1 earnings stability, and declining treasury yields.
The STAX fell every week of the April period, though the first week saw the heaviest selling as STAX fell 11%, the biggest weekly drop since the first week of April 2023. The third week of the four saw only mild net-selling but selling accelerated again in the final week ending April 25. On a monthly basis, April's overall STAX plunge of 14.85% was the deepest drop since March 2020, the first full month of the COVID-19 pandemic.
While clients didn't participate as much on the equity side, we did see selling of premium toward the end of the month as the CBOE Volatility Index® (VIX) pulled back from highs.
"We did see some ETF buying, which suggests that instead of trying to pick names that would do well with tariffs, clients decided to diversify," Mazzola said. "Clients were risk-averse, generally going back to names they know and companies that they tend to turn to in times of peril. Outside of NVDA, there was a noticeable absence of many of the AI chip providers that normally frequent this list."
Inflation data during the STAX period was relatively benign, continuing a trend, but investors nervously watched the Atlanta Fed's GDPNow meter for first quarter gross domestic product (GDP) fall into the red, suggesting tariffs already could be hurting the economy. When the government's first GDP estimate came out after the STAX period ended on April 30, it confirmed those fears, though much of the weakness was driven by a huge gain in imports that likely reflected pull-forward buying ahead of tariffs.
The labor market looked strong most of April, as March nonfarm payrolls rose a solid 228,000 and initial weekly jobless claims remained well below 230,000 all month, a relatively light level. Retail sales also popped in March, after faltering earlier this year. There's a chance some of this reflected pre-tariff stocking by consumers as expensive items like automobiles, electronics, and furniture sales all rose sharply.
Earnings season began in mid-April and featured solid results from the biggest U.S. banks, most of which referred to resilient consumers but expressed concern about possible tariff impact on business plans for their clients. However, analysts steadily cut their earnings growth estimates for later this year, calling into question current market valuations, which remain historically high even with the April stock market correction. Many other firms reported as well from across S&P sectors during the STAX period, with most beating Wall Street's estimates. But many withheld or withdrew guidance, citing tariff uncertainty.
Shakiness continued later in the STAX period as Treasury yields spiked and the dollar sank—two things that hadn't been expected in an atmosphere dominated by U.S. tariff concerns. The weakness in U.S. currency and fixed income markets might have reflected investors shying from these markets amid concerns about policy confusion related to both trade and the U.S. budget. Treasury note yields backtracked in the latter half of April, with the benchmark 10-year note yield eventually falling below 4.2% after touching 4.6% at its April highs.
Popular names bought by Schwab clients during the period included:
NVIDIA Corp. (NVDA)
Amazon.com Inc. (AMZN)
Tesla Inc. (TSLA)
Meta Platforms Inc. (META)
Palantir Technologies Inc. (PLTR)
Names net sold by Schwab clients during the period included:
Alibaba Group Holding Ltd. (BABA)
MicroStrategy Inc. (MSTR)
Boeing Co. (BA)
Netflix Inc. (NFLX)
UnitedHealth Group Inc. (UNH)
About the STAX
The STAX value is calculated based on a complex proprietary formula. Each month, Schwab pulls a sample from its client base of millions of funded accounts, which includes accounts that completed a trade in the past month. The holdings and positions of this statistically significant sample are evaluated to calculate individual scores, and the median of those scores represents the monthly STAX.
For more information on the Schwab Trading Activity Index, please visit www.schwab.com/investment-research/stax. Additionally, Schwab clients can chart the STAX using the symbol $STAX in either the thinkorswim® or thinkorswim Mobile platforms.
Investing involves risk, including loss of principal. Past performance is no guarantee of future results. Content intended for educational/informational purposes only. Not investment advice, or a recommendation of any security, strategy, or account type.
Historical data should not be used alone when making investment decisions. Please consult other sources of information and consider your individual financial position and goals before making an independent investment decision.
The STAX is not a tradable index. The STAX should not be used as an indicator or predictor of future client trading volume or financial performance for Schwab.
About Charles Schwab
At Charles Schwab, we believe in the power of investing to help individuals create a better tomorrow. We have a history of challenging the status quo in our industry, innovating in ways that benefit investors and the advisors and employers who serve them, and championing our clients’ goals with passion and integrity.
