STAX Generational Trends: Millennials Turn Bullish

Even with the Strait of Hormuz remaining shut and oil prices still elevated, Schwab clients were net buyers of equities in May. The Schwab Trading Activity Index^™ (STAX)—which analyzes Schwab client activity to gauge investor sentiment—rose 9.9% month-over-month to 55.08 as every generation turned more bullish after April's dip in sentiment.

Gen X (born 1965 to 1980) remained by far the biggest net buyers last month, posting a STAX score of 61.63. "Gen Xers are still willing to buy dips and have the funds to do so," said Joe Mazzola, head of trading and derivatives strategy at Schwab.

Mazzola noted that although semiconductor and memory stocks ended May with outsized gains, when stocks like Nvidia (NVDA), Micron Technology (MU), and Intel (INTC) pulled back in the middle of the month, they saw strong inflows from Gen X. "It's been a pattern we've seen throughout the year," he said. "They're willing to be more tactical with their buying."

Younger generations also grew more optimistic last month as major market indexes touched new highs.

Millennials' (born 1981 to 1996) STAX score stood out, rising 11.2% month over month to 54.10. This reading is now just shy of Baby Boomers' (born 1946 to 1964) reading of 55.23 and the Silent Generation's (born before 1946) 54.33 score.

Older generations have consistently had more bullish sentiment than younger generations since Schwab began tracking generational data two years ago, but that gap narrowed across the board last month. Gen Z's (born 1997 to 2012) STAX score jumped 11.4% to 45.82, while Gen Alpha's (born 2013 to 2024) score popped 10.2% to 46.35. 

(Note: A significant portion of Gen Alpha's trading is likely done by guardians, who could be more risk-averse with their dependents' money.)

There were signs that investors across every generation remained somewhat cautious, however. May's STAX score remained well below the highs seen in February and March, and three of the 10 most net-bought names were diversified exchange-traded funds (ETFs), rather than the typically popular high-flying AI stocks.

Looking at STAX scores by assets under management, there was a similar trend. Clients holding fewer assets turned more bullish in May.

Clients with between $10,000 and $100,000 saw their STAX score jump more than 10.5% month over month to 57.55, while clients with between $2,000 and $10,000 saw their score rise 10.8% to 56.86. Rising consumer prices don't yet seem to be materially weighing on clients' market enthusiasm.

However, excluding ultra-wealthy clients, those with more assets—which typically include a higher percentage of older generation clients—were slightly more cautious. The STAX score for clients with between $500,000 and $1 million increased 9.5% to 50.12, while the score for clients with between $1 million and $5 million jumped 9.3% to 50.18.