Active traders see rising economic risks but plan to buy the dip if opportunity arises

Young investors still adding to their portfolios and seeking guidance amidst bearishness

WESTLAKE, Texas--(BUSINESS WIRE)--May 20, 2026-- Charles Schwab, a leader in investing and trading with $5.3 trillion in retail client assets, 27 million retail brokerage accounts, and 7.7 million daily average retail trades in Q1 2026, today released its Q2 2026 Retail Client Sentiment Report, which finds that stock market sentiment is net bearish for the quarter with geopolitical and global macroeconomic issues as the leading concerns for the firm’s retail clients.

According to Schwab's Q2 Retail Client Sentiment Report:

• Twenty-eight percent of Schwab clients are bullish on the U.S. stock market compared to 41% in Q1, and 58% of clients are bearish compared to 41% in Q1.
• Forty-three percent say it’s a good time to invest in equities, compared to 49% in Q1.
• Forty-nine percent are confident in their decision making compared to 45% in Q1.
• Thirty-nine percent feel better off financially compared to a year ago, a similar percentage to Q1 (40%) but down from 55% in Q4 2025.
• One-quarter of clients say geopolitical or global macroeconomic issues are their primary concern in Q2, followed by the political landscape in Washington DC (24%) and uncertainty due to market volatility (9%).

The last time Schwab’s retail client market sentiment was net bearish was Q2 2025, when 61% of clients were bearish and 27% were bullish.

Among the 58% of clients who are bearish this quarter, nearly half feel confident they have a plan in place to withstand a market correction, and about four in 10 (41%) of Schwab’s clients overall plan to add money to their investment portfolio in Q2.

Additional findings from Schwab’s Q2 report include:

• Fifty percent of Schwab clients think inflation will reignite this quarter, and another 35% think it will hold steady.
• Fifty-two percent say the stock market is currently overvalued.
• Schwab clients expect geopolitical conflict (70%), oil prices (53%), and inflation (38%) to have the biggest impact on the direction of the stock market for the remainder of 2026.
• Eighty-nine percent of clients are at least somewhat confident about reaching their financial goals.

“Short-term concerns and uncertainty can move market sentiment quickly, but bearish sentiment this quarter hasn’t shaken our clients’ confidence or engagement,” said Jonathan Craig, Head of Retail Investing at Charles Schwab. “We continue to see strong client interaction with our platforms, professionals, and educational resources as clients navigate the markets and their portfolios. We’re providing the information, tools and support investors need through a wide range of channels, enabling them to stay disciplined and stick to their plans when markets get noisy.”

Active traders see rising risks, but also opportunity

Market sentiment among Schwab’s active trader clients is slightly less bearish compared to retail clients overall, although economic concerns have intensified among this group:

• Thirty-eight percent of Schwab trader clients are bullish on the U.S. stock market and 45% are bearish.
• 67% of traders anticipate weakening labor market conditions, up from 55% in Q1.
• Thirty-nine percent of traders foresee a recession in 2026, up from 24% in Q1, while 34% do not believe there will be a recession this year.

Amidst the economic concerns, traders continue to look for opportunities with 82% saying they are very or somewhat likely to “buy the dip” if there is a notable market decline, and 39% describing themselves as at least somewhat risk-seeking.

Traders say geopolitical developments will have the greatest impact on their trading strategy this quarter (76%), followed by inflation data (49%), Fed policy (40%), corporate earnings (40%), and AI developments (38%).

Schwab’s trader clients remain most bullish on value stocks (52% bullish), AI (47% bullish), commodities (44% bullish), growth stocks (42% bullish), and domestic stocks (40% bullish), although bullishness on growth stocks (53% in Q1) and domestic stocks (50% in Q1) has softened from last quarter.

At the sector level, traders are most bullish on energy (66% bullish), utilities (51% bullish), and information technology (45% bullish). They’re most bearish on real estate (46% bearish), consumer discretionary (44% bearish), and finance (36% bearish).

“Traders see opportunities in every type of market, including downturns, so it’s not surprising to see our trader clients continuing to lean in,” said James Kostulias, Head of Trading Services at Charles Schwab. “When sentiment turns, we tend to see clients engaging in risk-off profit-taking—and that’s not just a strong driver of engagement, it’s smart trading. In fact, we see tremendous client engagement across the holistic spectrum of support we provide to traders including platforms, products, in-depth education and coaching for all skill levels, service and trading specialists, and – importantly – risk management tools to help clients trade with confidence."

Gen Z stays engaged despite market bearishness

Schwab’s Gen Z clients largely mirror the broader shift toward bearish market sentiment in Q2, but these younger clients also remain highly engaged, indicating they plan to add money to their investment portfolios, and they are the most likely to seek advice and guidance:

• About one quarter (24%) of Schwab's Gen Z clients are bullish on the U.S. stock market in Q2, while 58% are bearish.
• Despite the decline in sentiment, Gen Z confidence has held up, with 44% feeling confident in their investing decisions and 87% saying they are at least somewhat confident in reaching their financial goals.
• Sixty-two percent of Gen Z clients plan to add money to their investment portfolio in Q2 with ETFs (46%) and individual stocks (37%) being the asset classes they’re most likely to move assets to this quarter.
• More than one quarter (27%) of Gen Z clients plan to seek investing guidance or advice – a higher percentage than Schwab clients overall.
• Gen Z clients are also most concerned about geopolitical and global macroeconomic issues (28%) and the political landscape in Washington DC (17%), but they are more concerned than Schwab’s clients overall when it comes to a possible AI bubble (12%).

“We see a growing number of young people getting invested, with Gen Z representing roughly a third of Schwab’s new clients, and they are doing it in a thoughtful way as we see in our data and our daily interactions with them,” said Craig. “With so much investing information inundating young investors, they need trustworthy guidance, education, and resources to help them build positive investing behaviors. What these Gen Z clients tell us in our sentiment reports is backed up by their behaviors – one-third of retail households who created a financial plan with Schwab over the last two years are in their 20s or 30s. That’s giving them the confidence to navigate all kinds of market cycles.”

About the Charles Schwab Client Sentiment Survey

The Charles Schwab Client Sentiment Survey is a quarterly study exploring the outlooks, expectations, plans, and points of view of clients at Charles Schwab. The Q2 2026 study included 1,128 retail clients and 1,415 active trader clients at Charles Schwab with retail assets of at least $2,000 and was fielded from March 24 through April 1, 2026. Active traders are defined as clients who actively trade equities or trade options, futures, or forex. An additional oversample of 293 Gen Z clients was collected for Gen Z-specific reporting.

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.

Disclosures

This material is intended for informational purposes only. The investment strategies mentioned may not be suitable for everyone. Each investor needs to review an investment strategy for his or her own particular situation before making any investment decisions.

Investing involves risk, including loss of principal, and for some products and strategies, loss of more than your initial investment.

©2026 Charles Schwab & Co., Inc. All rights reserved. Member SIPC.

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Margaret Farrell
Director, Corporate Affairs
(203) 434-2240
margaret.farrell@schwab.com

Source: The Charles Schwab Corporation