Retail investors continued to buy the dip in July, but the latest trading data from Charles Schwab suggests they were becoming choosier with their bets.
The latest Schwab Trading Activity Index, or STAX, released Monday, rose to 59.80 in July. That’s up slightly from 59.12 in June, which Schwab described as a four-year high.
The increase came as Schwab clients remained net buyers of equities, using late-month market declines to add exposure across individual stocks, ETFs and options.
"Schwab clients were selective about where they put their money," Joe Mazzola, Head Trading and Derivatives Strategist at Charles Schwab, said.
Clients were buying stocks that had pulled back while taking profits in names that had already rallied or no longer offered the most compelling opportunities, he said.
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Space Exploration Technologies Corp. (NASDAQ:SPCX) was among the most popular stocks net bought by Schwab clients in July.
Micron Technology Inc. (NASDAQ:MU), Intel Corp. (NASDAQ:INTC), Oracle Corp. (NYSE:ORCL) and Tesla Inc. (NASDAQ:TSLA) followed.
The list reveals something important about retail positioning. Investors were not simply buying the biggest technology stocks after the market moved higher. They were targeting companies where they saw a more compelling opportunity after recent price declines
Memory-chip makers became one of the major beneficiaries of the artificial intelligence infrastructure boom. Powerful AI systems require more high-bandwidth memory and increasingly complex data-center architectures.
Still, Micron, one of the world’s leading memory and storage stock options, tumbled 28% in July — its worst month since May 2015.
Micron and Intel were particularly notable among the semiconductor names, suggesting investors were willing to use weakness in the chip sector as an opportunity to add exposure.
Tesla also remained among the stocks Schwab clients were buying, highlighting continued interest in one of the market’s most actively traded growth names.
But retail investors were not buying everything.
Schwab Investors Were Selling Too
The other side of the trade makes the rotation even clearer.
Schwab clients were net sellers of Apple Inc (NASDAQ:AAPL), Advanced Micro Devices Inc (NASDAQ:AMD), Broadcom Inc (NASDAQ:AVGO), PayPal Holdings Inc (NASDAQ:PYPL) and Adobe Inc (NASDAQ:ADBE).
That does not necessarily mean investors had turned bearish on those companies.
Mazzola said clients were also taking profits in stocks that had already run up or "no longer offered the most compelling opportunities."
In other words, July’s retail activity looked more like rotation than retreat.
That distinction matters.
Gen X Leads Retail Buying
The strongest buying interest came from two groups: self-directed traders, whose bullish activity accelerated during the month, and Gen X clients, who continued to lead net buying by age cohort.
That adds another layer to the July data.
Retail sentiment remained bullish, but investors were becoming more tactical about where they deployed capital.
The STAX is Schwab’s proprietary, behavior-based index, designed to track retail investor positioning and trading activity across its millions of client accounts.
Trading remained skewed toward put selling, particularly in technology and semiconductor stocks. That suggests investors were willing to generate income while maintaining exposure to areas where they remained constructive.
For investors watching the retail trade, July’s message was clear: the appetite for buying weakness remains alive.
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