Schwab Trading Activity Index™: Cautious Optimism in July as STAX Score Edges Upward
Schwab clients were net sellers of equities in July; Net selling was highest in the Information Technology sector while net-buying activity was seen in Communication Services, Health Care and Financials
The Schwab Trading Activity Index™ (STAX) increased to 41.79 in July, up from its score of 40.66 in June. 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.
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The reading for the four-week period ending July 25, 2025, ranks "low" compared to historic averages.
"What the July STAX shows us is that while Schwab's retail clients are bullish, that optimism is measured," said Joe Mazzola, Head Trading and Derivatives Strategist at Charles Schwab. "The S&P 500 may have hit new all-time highs in July, but when we consider the ways Schwab's retail clients are engaging with the markets, we're not seeing the kinds of risk-on strategies that would indicate a lot of confidence in the rally's longevity."
Stock market volatility fell to five-month lows in July, easing as geopolitical worries receded and the U.S. budget debate got settled relatively easily. Tariff concerns remain in the market, but a deal with Japan in late July with 15% tariffs on its products appeared to calm worries. The Cboe Volatility Index® (VIX) fell beneath 15 by late July, well below its historic 20 average.
Economic data generally held up decently during the STAX period, with June seeing 147,000 U.S. jobs created and unemployment dropping to 4.1%, both improvements from May. Retail sales in June grew a healthy 0.6% from May, and preliminary July University of Michigan Consumer Sentiment rose to 61.8, its highest level in five months.
Inflation reports in July brought new concerns that tariffs might be factoring into price growth, though monthly gains weren't extraordinary. The June Consumer Price Index (CPI) saw headline CPI up 0.2% and core – which excludes food and energy – up 0.3% from May. And on an annual basis, the CPI rose 2.7%, up from 2.4% in May. Even as services prices saw slower increases, prices of goods ticked higher, to some a sign that tariffs were beginning to take their toll. Prices for toys, clothing, and furnishings rose.
Second quarter earnings season got off to a mostly solid start in July, with around 83% of companies exceeding Wall Street analysts' expectations. The estimate for blended second quarter profit growth, which includes companies reporting and projections of companies yet to report, rose while actual earnings from companies reporting the first few weeks of earnings season climbed more than 8%.
The rally in July broadened through the month, with nearly 75% of S&P 500 stocks trading above their respective 50-day moving averages by the end of the STAX period. Volatility continued to depress, pushing the VIX to the low 15's, as the S&P 500 failed to record a 1% move for the fourth consecutive week.
Stocks briefly dove and yields for the 10-year Treasury note climbed to nearly 4.5%, the high end of their recent range, on media reports that President Trump had asked congressional Republicans if he should fire U.S. Federal Reserve Chairman Jerome Powell. After reassurance that the termination would not take place, stocks resumed their rally and yields eased.
Aside from that spike, the Treasury market generally marched in place during July despite worries that the Republican budget plan could significantly raise U.S. debt (yields trade inversely to Treasuries). Yields again fell below 4.3% for the benchmark 10-year note in early July, but mostly stayed between 4.3% and 4.5%, not far from the Fed's target range.
Popular names bought by Schwab clients during the period included:
- NVIDIA Corp. (NVDA)
- Tesla Inc. (TSLA)
- Palantir Technologies Inc. (PLTR)
- Amazon.com Inc. (AMZN)
- UnitedHealth Group Inc. (UNH)
Names net sold by Schwab clients during the period included:
- Apple Inc. (AAPL)
- Ford Motor Co. (F)
- Advanced Micro Devices Inc. (AMD)
- Boeing Co. (BA)
- Nike Inc. (NKE)
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.
More information is available at aboutschwab.com. Follow us on X, Facebook, YouTube, and LinkedIn.
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