Schwab Trading Activity Index Drops to Two-Year Low Amid April Market Volatility

Charles Schwab reported a sharp decline in its Schwab Trading Activity Index (STAX) for April, with the score falling to 41.18 from 48.36 in March.

The 14.85 percent drop marked the steepest monthly decline since March 2020 and reflected broad risk aversion among Schwab retail clients amid tariff concerns, market swings, and earnings uncertainty. The STAX tracks investor behavior across millions of Schwab accounts and ranked April’s activity as “low” compared to historical averages.

“Schwab clients were net sellers on a dollar basis of every S&P 500 sector except energy”

Joe Mazzola, Head Trading & Derivatives Strategist at Schwab, commented, “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.”

The index declined every week in April, led by an 11 percent fall in the first week, the largest weekly drop in two years. While the broader market rebounded late in the month, clients pulled back from individual equities, reallocating capital to fixed income and ETFs as perceived lower-risk alternatives.

Clients sold heavily in Information Technology, Consumer Staples, and Consumer Discretionary. Stocks like Alibaba, MicroStrategy, Boeing, Netflix, and UnitedHealth were among the most net sold. The few stocks that attracted buying interest included Nvidia, Amazon, Tesla, Meta, and Palantir.

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.”

April saw volatility driven by unexpected policy shifts and economic indicators. Early in the month, U.S. stocks fell to 13-month lows following tariff policy announcements, then recovered on optimism tied to trade negotiations and stable earnings reports. However, inflation data remained muted, and the Atlanta Fed’s GDPNow gauge turned negative, raising concerns about economic softness.

Economic data revealed mixed signals. March payrolls rose by 228,000 and jobless claims stayed low, but the initial GDP estimate released after the STAX period confirmed a slowdown, driven by a rise in imports, possibly from pre-tariff stocking. Retail sales rebounded in March, but analysts lowered earnings projections for later in the year, citing uncertain global trade dynamics.

Concerns also emerged in the bond and currency markets. Treasury yields briefly touched 4.6 percent before retreating below 4.2 percent, while the dollar weakened. Schwab analysts attributed these moves to investor uncertainty around trade and budget policy direction.

The STAX, which is calculated from a statistically significant sample of Schwab client accounts, reflects real-time investor behavior rather than sentiment surveys or market predictions. While it is not a tradable index, Schwab clients can monitor it using the symbol $STAX on thinkorswim platforms.

The firm reiterated that past performance does not predict future behavior and advised investors to consider multiple information sources when making financial decisions.