Schwab traders were back buying shares in May after a slowdown in April, scooping up shares of Nvidia, Tesla and some of the other major stocks that institutions also have been favoring.
Indexes rebounded after April's declines. The Nasdaq added nearly 7% and reached a fresh record high while the S&P 500 was up 5% and also hit a record high in May. Signs of a softening labor market kept up hopes of rate cuts and lifted stocks.
The Schwab Trading Activity Index, or STAX, rose to 49.05 in May from April's 48.87. The index is based on Schwab's own formula based on a sampling of completed trades in clients' accounts. Holdings in clients' accounts are then used to calculate individual scores. STAX reflects the median of these individual scores, which reflect activity and returns.
Schwab's head of trading and derivatives strategies, Joe Mazzola, said traders bought "Artificial Intelligence (AI) chip makers and the e-commerce and media companies that rely on them."
Even so, according to Schwab's latest report, trading for the five weeks ending May 31 ranked "moderate low" based on historical averages.
Investors Favored 4 Magnificent Seven Stocks In May
Investors bought Nvidia, Tesla, Amazon.com and Microsoft.
Nvidia has exceeded a 25% gain from a post-split handle buy point of 92.22. Microsoft is just below a buy point of 430.82, according to IBD MarketSurge. Tesla has been holding the 50-day moving average, but its chart is bearish with the 200-day moving average above the 50-day line. Amazon has risen above the 50-day line with a possible entry at 191.70.
For the month of May, Nvidia stock gained 27% while Tesla fell nearly 3%. Microsoft rose nearly 7% while Amazon's gains were nearly 1%.
But Schwab traders were heavy sellers of Apple, Alibaba, Bank of America, Snap and ExxonMobil.
Investors shed Apple holdings even as the stock gained 13% in May. It is forming a large cup base, and shares climbed in anticipation of Apple's Worldwide Developers Conference on June 10.
Alibaba rose 5%, although it is still mired in a yearlong downtrend. Bank of America also rose 5% as it extended a bounce off its October low, while Snap and Exxon fell slightly. Snap and ExxonMobil are in corrections but forming new bases.
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