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Schwab: Investors looked for a bounce back last month

Jeffrey Cane

Illustration of a bull and a bear both staring down at a laptop computer — Illustration: Sarah Grillo/Axios. Stock: Getty Images

Retail investors were more willing to place bets on individual stocks last month after preferring exchange-traded funds (ETFs) in September, new data from Charles Schwab shared exclusively with Axios shows.

"I think they were waiting for a pullback in October, and they got it," says Joe Mazzola, head trading strategist at Schwab, referring to retail investors who took advantage of a dip in prices to pour into semiconductor and AI-adjacent companies.

Why it matters: Such optimism among ordinary individual investors is now being put to the test after a rocky start this month.

Zoom out: October was peak earnings season, and for some tech stocks that had disappointing results or outlooks, like Intel, investors saw the resulting selloffs as perhaps overdone and an opportunity to buy, Mazzola says.

In addition to Intel, some of the most popular stocks bought by Schwab clients in October included SpaceX, Nvidia, Micron Technology and Alphabet.

By the numbers: The Schwab Trading Activity Index, or STAX, climbed to 61.94 in October, from 58.92 in September, per a release out Monday morning.

Schwab says that its index shows what investors were actually doing in the market each month, as it is calculated by analyzing the stock positions and trading activity of its millions of client accounts.

Reality check: While net buying overall was up for the month, only three of the S&P 500 index's 11 sectors — communication services, information technology and industrials — were beneficiaries, as investors sought out growth stocks.

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Schwab: Investors looked for a bounce back last month

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