Schwab clients were buyers of equities in February; Buying in Information Technology, Consumer Discretionary and Communication Services early in the month preceded a shift away from the ‘Magnificent Seven’ weeks later

WESTLAKE, Texas--(BUSINESS WIRE)--Mar. 10, 2025-- The Schwab Trading Activity Index™ (STAX) increased to 51.94 in February, up from its score of 49.45 in January. 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 February 28, 2025, ranks “moderate” compared to historic averages.

“January optimism carried through to the beginning of February, although we saw sentiment sink toward the end of the month,” said Joe Mazzola, Head Trading & Derivatives Strategist at Charles Schwab. “Looking at the month as a whole, Schwab clients net bought equities but on a dollar basis, they were net sellers of all S&P 500 sectors apart from Financials and Materials. Positive earnings drove a good amount of buying early in the month, but we saw clients pull back significantly and engage in de-risking behaviors as the potential impact of looming tariffs and weak economic data began to dominate the headlines again after a brief reprieve.”

The S&P 500 went through two distinct periods in February, starting off strong and hitting consecutive record highs by the mid-month in response to a delay in threatened U.S. tariffs, double-digit fourth quarter earnings growth, and hopes for continued strong U.S. economic and corporate performance. The mood changed quickly around February 21 as a result of renewed tariff threats, uncertain geopolitics, a decline in consumer sentiment, a surprise jump in U.S. weekly jobless claims, the Atlanta Fed's outlook for negative first quarter gross domestic product (GDP) growth, and somewhat disappointing outlooks from Walmart (WMT) and Nvidia (NVDA) changed the tone and pushed the SPX down about 1% for the full month.

The tech-heavy Nasdaq suffered more dramatic losses as investors resumed their rotation out of "Magnificent Seven" names and into what they perceived as the potential safety of Treasuries, defensive sectors, and gold, among other assets. The benchmark U.S. 10-year Treasury note yield fell along with the SPX after topping 4.6% briefly in mid-February, not far below the January peak. By the end of the month the 10-year yield fell below 4.25%, the lowest level in two months, amid economic growth fears and rising chances for Fed rate cuts later this year.

Inflation data was mixed in February, with a higher-than-expected Consumer Price Index (CPI) reading but some progress in the January Personal Consumption Expenditure (PCE) Price Index that came out at the very end of the month. Nonfarm Payrolls for January showed smaller-than-expected jobs growth of 143,000, but some analysts attributed that partly to cold weather and wildfires that crimped economic activity.

As stocks retreated, the Cboe Volatility Index (VIX) clawed back above 20 intraday by the end of the month, up from below 15 in mid-February. Rising volatility mainly appeared connected to trade war threats, though even toward the end of February many analysts believed the March 4 tariffs on Canada, Mexico, and China could possibly be postponed or lightened, which ended up not being the case. When February began, investors built in about one Fed rate cut for the year, according to the CME FedWatch tool. But as economic data showed softness and tariff threats mounted, the month ended with much higher odds of the Fed cutting rates before mid-year and possibly once or twice more after that before the end of 2025.

Popular names bought by Schwab clients during the period included:

• Tesla Inc. (TSLA)
• Palantir Technologies Inc. (PLTR)
• Amazon.com Inc. (AMZN)
• Alphabet Inc. (GOOGL)
• Microsoft Corp. (MSFT)

Names net sold by Schwab clients during the period included:

• Meta Platforms Inc. (META)
• Super Micro Computer Inc. (SMCI)
• Apple Inc. (AAPL)
• Intel Corp. (INTC)
• AT&T (T)

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.

0325-3ATN

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At the Company
Margaret Farrell
Director, Corporate Communications
(203) 434-2240
margaret.farrell@schwab.com

Source: The Charles Schwab Corporation