Schwab Trading Activity Index (STAX) Summary:August 2025
Monthly Summary
The S&P 500® index (SPX) rally slowed in August, but Schwab clients became more enthusiastic buyers. The STAX climbed for the third straight month and reached a five-month high. Clients tracked by STAX remained large net-sellers of info tech shares overall but continued buying big names like Nvidia ( NVDA) and Palantir ( PLTR). They also gravitated toward sectors like financials and health care during August and generally showed more willingness to look beyond the mega-caps.
That said, clients didn't depart a great deal from their previous strong attraction to a duo that's placed high in net-buys this summer.
"Nvidia and Palantir were the two clear winners," Joe Mazzola, director of trading & derivatives strategy at Schwab, said. "And between Nvidia and Palantir, Nvidia was lengths ahead, as net buys for Nvidia exceeded Palantir by over 50%."
STAX rose to 43.69 in August, up 4.55% from 41.79 in July and the best mark since 48.36 in March. STAX climbed the ladder last month, rising every week and peaking in the final week of August. This marks the second month in a row the STAX registered its weekly high at the period’s close. STAX hasn't declined week over week since late June, a stretch of nine positive weeks.
In addition, STAX easily outpaced the S&P 500 index in August, climbing 4.55% versus just 1.12% for the index. This could reflect Schwab clients playing catch up and adding more risk than previous months after STAX growth trailed the S&P 500 index every month since February.
While STAX can't indicate where stocks will go from here, the STAX last peaked in February at nearly 52, roughly coinciding with a near-term top in the S&P 500 index. The S&P 500 then dove in March and April, followed down by STAX. Last month's five-month high in STAX also coincided with a new all-time high for the S&P 500 index at 6,508, intraday, on August 28.
"Markets in August recovered from a 3% drop from July 31 to August 1 predicated by disappointing non-farm payroll data. The slow grind higher for the rest of the month led to a decrease in market volatility, culminating with the VIX hitting a multi-month low." Mazzola said. "As market volatility contracted, clients gained confidence, and their buying patterns exceeded the average."
This type of buying on low volatility could be a signal that Schwab clients were looking beyond the ebb and flow of stock prices and seeing signals of a positive buying environment. Low volatility can sometimes indicate strength ahead for stocks, though it's not a perfect predictor. The Cboe Volatility Index (VIX) hit a 2025 low of 14.12 late in August. It peaked at above 60 in April, a month when STAX data showed Schwab clients were extremely cautious.
Though clients have often displayed caution, there was a move in August toward some parts of the market like cryptocurrency and higher-beta stocks.
"One of the reasons you've started to see STAX move up is the inclusion of new entrants to the net-buy top 10 list including such stocks as CoreWeave ( CRWV) and Bitmine Immersion Technologies ( BMNR)," Mazzola said. "Both of these stocks have exhibited higher amounts of volatility relative to the S&P 500 which can lead to a higher STAX score."
Overall, however, clients gravitated toward big names—like Nvidia, Palantir, UnitedHealth Group ( UNH), and Amazon ( AMZN)—that often placed high on the list in recent months, typically buying stocks when their prices dipped and selling stocks as they swung higher. Both Apple ( AAPL) and Meta Platforms ( META) were large net-sells in August as their shares charged out of the gate before losing steam. Clients swooped into both UnitedHealth Group and Amazon after those stocks fell post-earnings and kept buying as they climbed out of their troughs.
For the second straight month, Apple ( AAPL) stock was most heavily-net sold by Schwab clients. Net-selling beyond Apple included automobile makers Tesla ( TSLA) and Ford ( F), with Tesla moving from the net-buy column in July to net-sell in August and Ford remaining out of clients' favor a second straight month.
Tech has now seen strong selling by clients since December and was easily the most net-sold sector in dollar value last month. Behind tech in net-sells were consumer discretionary—hurt by selling of Tesla—energy, materials, consumer staples, real estate, and utilities. The sector that led in net-buying for August was communication services, followed by health care, financials, and industrials. Only four of 11 S&P sectors were net-buys last month.
Economic data during the August STAX period tended toward the weaker side of the ledger, starting with the July nonfarm payrolls report with just 73,000 jobs added and downward revisions of more than 250,000 to the two prior monthly reports. This data in early August shocked many investors, who suddenly saw the jobs market looking relatively weak when it had seemed to be holding up moderately well until that point.
The light jobs reading and revisions immediately caused futures trading to price in almost 80% chances of a Federal Reserve rate cut at the September meeting, according to the CME FedWatch Tool. September rate cut odds continued to climb through August, reaching nearly 90% by the end of the month. Looking farther out, the tool projected about 50-50 chances of either two or three rate cuts by year-end.
Rate cut odds rose despite a concerning report on producer prices in late August showing the July Producer Price Index (PPI) up much more than expected at 0.9% for both headline and core PPI (core excludes food and energy). This report, followed by a slightly hot Personal Consumption Expenditures Price Index (PCE) at the end of August, sparked concerns that tariff-related price increases are starting to filter into prices faced by companies and ultimately could trickle down to consumers.
Other August reports showed U.S. manufacturing still struggling during July and the housing market remaining relatively soft as high mortgage rates continue. However, the government kept its second quarter gross domestic product (GDP) growth estimate relatively solid at 3.3%. At the same time, second quarter earnings growth for S&P 500 companies was close to 12% by the end of August with nearly 100% of firms reporting. Analysts had predicted just 5% back in June, but strong performances from the Magnificent Seven helped communication services and technology earnings grow sharply from a year ago.
Those solid earnings and hopes for a rate cut helped support major indexes in August, and Treasury yields stayed in check as well. The 10-year yield spent much of the month bouncing in its long-term range between roughly 4.2% and 4.4%. That's roughly in line with the Fed's current target range of 4.25% to 4.5%, but the Fed expects the terminal rate to drop to near 3% over the long term.
The Fed met in late July and kept rates where they've been since the last cut in late December. But several Fed policy makers talked about the need for cuts after the July unemployment data and other jobs-related data later in August revealed what they called softness in the labor picture. Later in August at the Fed's annual Jackson Hole Economic Symposium, Fed Chairman Jerome Powell didn't outright endorse a rate cut, but signaled that he might be ready to back one in September based on the preponderance of weak job market signals.
Trading
Top buys
- Nvidia topped the net-buy list for the second-straight month as clients piled in ahead of its late August earnings report. Though Nvidia finished second to other stocks the first two weeks of STAX period, it took the lead the final three weeks and enjoyed its biggest net-buy week the final week of August when it reported. That was the same week shares topped $184, close to the all-time high set earlier in August. Earnings narrowly beat expectations and guidance looked relatively conservative, causing shares to sell off the final two days of the month, but it appears Schwab clients bought the dip.
- Palantir placed second behind Nvidia during the reporting period, even as the share price pared gains from its all-time-high price of $190 mid-month. "The majority of Palantir’s buying volume occurred during the third week of the month, as prices pulled back toward the $155 level which also coincided with its 50-day moving average." Mazzola said.
- UnitedHealth Group has been one of the worst 2025 performers on the S&P 500 but again enjoyed net-buying from Schwab clients in August. "We saw clients buy shares of UnitedHealth back when they were around $230, and by early September the stock traded up 30% from there," Mazzola said. "Clients had the foresight to scoop up shares the first week of the month and were fortunate to take part in that 30% move."
- Amazon stayed in clients' good graces during August after placing in the top five in July. Clients appeared to buy on a post-earnings dip early in the month. "After earnings, the stock pulled back from $235 to around $212, near the 200-day moving average, and clients used that as an opportunity to buy shares the second and third weeks of the month and basically hold on," Mazzola said.
- Microsoft also appeared to attract some technical buying interest from clients after falling toward its 20-day moving average. As with Amazon, this was a post-earnings pullback story as clients got a little more aggressive buying shares as they fell to $520 and then again as they descended toward $500.
- Other stocks that saw strong net-buying in August included Advanced Micro Devices ( AMD), Coreweave, and Intel ( INTC).
Top sells
- Apple ( AAPL) again finished as the biggest net-sell stock, the second month in a row clients backed off from this mega-cap despite shares finally emerging from their long 2025 slumber. Clients appeared eager to sell into strength with Apple, which rallied in part on strong earnings but also on improved relations between the company and the White House after Apple promised to invest more in U.S. manufacturing.
- Meta Platforms ( META) saw large net-selling from clients during the period and very little buying interest. As shares climbed after earnings, it appears clients pulled back exposure. "Clients chose to fade that 10% earnings rally and continued to do so throughout the month," Mazzola said.
- Reddit ( RDDT) a smaller stock, made a surprise appearance among the most net-sold August shares. Investors appeared to sell into strength, as the stock jumped 60% in a couple of weeks after earnings. Clients used that as an opportunity to trim.
- Tesla ( TSLA) went from second-most net-bought stock in July to fourth-most net-sold stock in August as shares continue to trade in relatively range-bound territory. "Tesla is losing its luster as a trader favorite given the fact that it's been rangebound since May between $270 and $350," Mazzola said. "Option prices are seeing a major drop in implied volatility."
- Ford ( F) again finished among the top net-sold stocks, with both Ford and Tesla possibly hurt by fundamental worries over U.S. automobile market competition and margins considering the heavy impact of tariffs.
Historical Overview
The Schwab Trading Activity Index (STAX) has generally correlated with the S&P 500 as clients react to equity price movements, but the index has gone through uncorrelated periods. In 2019, when Charles Schwab began tracking the STAX, the S&P 500 posted its best first quarter since 1998, soaring over 13% on optimism of a possible U.S. trade deal with China. This led to a corresponding rise in the STAX to 42.38 through March 2019. In April 2019, however, the STAX diverged with equity performance for the first time, decreasing despite a move higher in the S&P 500. The STAX remained out of sync with equities throughout the next few months, as trade uncertainty between the U.S. and China continued to dominate headlines, falling to 41.47 through June 2019. The STAX was range-bound during the summer of 2019, as trade tensions led to investors favoring less-risky assets, including fixed-income products. The STAX bounced back in the fourth quarter of 2019 on renewed optimism of economic growth as trade tensions diminished, reaching a new high of 49.56 in December 2019.
The beginning of 2020 brought a new record high for equities as the S&P 500 crossed above 3,300 for the first time. The STAX also reached a new high of 50.30 in January 2020, crossing above 50 for the first time. Things quickly turned, however, as the COVID-19 pandemic brought tremendous uncertainty and volatility. The STAX, alongside U.S. equities, saw steep declines over the next few months before ultimately bottoming at 35.54 in April 2020. Uncertainty began to dissipate as slight upticks in economic activity and a fierce bounce back in the equity market was met with investor optimism. The STAX index rebounded mightily as six straight months of increased market exposure steered the index to a reading of 47.09 in October 2020. Equities ended 2020 with new all-time highs in December on hopes of potential fiscal stimulus and the beginning of widespread vaccine rollouts. The STAX also closed the year at a new high of 53.25.
Hopes began to become reality in early 2021 as Congress passed a $1.9 trillion rescue package that included $1,400 stimulus checks for many Americans. The equity market built on its strong finish to 2020 by charting more all-time highs to kick off 2021, culminating in the S&P 500 crossing above 4,000 for the first time on April 1, 2021. The STAX followed suit as a strong first quarter ended with a score of 67.94 in March 2021. The STAX continued to trend higher in the second quarter, ending June 2021 at 75.24 as optimism reigned as equities climbed to new highs. The STAX moved sideways over the next several months before marking its highest score to date in November 2021 at 75.36. Concerns surrounding resurging COVID-19 cases and uneasiness regarding increasing price inflation dampened sentiment to close out the year as the STAX fell to 68.17 in December 2021.
The first half of 2022 was dominated by geopolitical conflict in Ukraine and increasing price inflation, resulting in the Federal Reserve raising interest rates for the first time since before the pandemic. The increased geopolitical uncertainty and tightening monetary conditions led to a significant downturn in U.S. equities with the S&P 500 falling more than 20% from its all-time high of 4,818.62 on January 4, 2022. The STAX also saw pressure, declining for eight straight months through July 2022 to 42.03. Ending the streak of declining sentiment, the STAX bounced back in August 2022 to 43.31, but the optimism was short-lived as the STAX declined the final four months of 2022 to end the year at 37.20, its lowest level since the height of the uncertainty surrounding the COVID-19 pandemic in April of 2020.
The STAX ended 2022 at its lowest level since April 2020 but began 2023 with three consecutive months of increasing scores. A resurgent tech trade driven by hype around increased investment into artificial intelligence bolstered sentiment. April saw the first decline in the STAX for 2023 as uncertainty surrounding the health of the banking system dampened sentiment. The STAX bounced back sharply to close out the second quarter, finishing at 46.76 in June, its highest level in over a year. Equities continued to rally throughout much of the summer, and the STAX reached 48.08 in August, its highest level of 2023. Interest rates rose dramatically throughout the fall months, pressuring equities. The STAX posted three straight monthly declines before bouncing back in December 2023 to end the year at 44.56 after a dovish pivot from the Federal Reserve sent equites near all-time highs.
In 2024, the STAX rebounded above 50 by mid-year after the S&P 500 crossed above 5,000 for the first time. Then it sank sharply in late summer amid several blows, including a Bank of Japan rate hike that caused worry about the chance of investments made with cheap yen flowing out of U.S. stocks and Treasuries and back into the Japanese market, along with worries about slowing U.S. jobs growth. The Fed's subsequent 50-basis point rate cut in September—its first cut since the inflation crisis of 2022-2023—eased pressure on stocks and Treasuries and the STAX steadily climbed to close the year, rising three months in a row from October through December as U.S. economic growth appeared better and earnings continued to come in relatively firm. A mid-December "hawkish" rate cut by the Fed amid rising inflation concerns sent stocks sharply lower and might have contributed to some portfolio rebalancing as investors trimmed positions in outperformers like information technology and communications services to add exposure into underperforming sectors like health care and energy.
STAX ended 2024 at 51.16 and then grew choppy in early 2025 as the second Trump administration's economic policies created market uncertainty. STAX fell 14.85% to a two-year low of 41.18 in April 2025 as clients shied from stocks following Trump announcing global tariffs and then continued to drop in May 2025 despite stocks roaring back from their tariff-related lows. STAX began to slowly rebound through the summer of 2025 as stocks again soared to record highs by late August. (0925-AHDX) |
