Schwab clients turn bullish on US stocks as confidence surges in Q3
Among active traders, inflation has re-emerged as the dominant macro concern: 52 percent believe inflation will be the key driver of market direction in the second half of 2026, up from 40 percent in Q2. Geopolitical conflict (44 percent) and artificial intelligence developments (35 percent) round out the top factors retail clients expect to shape markets for the remainder of the year.
Still, fears of recession are receding with only 26 percent of active traders expecting a US recession this year, down from 39 percent in Q2.
Where active traders are placing their bets
Among active traders, technology and energy are leading the sentiment charge. Information technology is the most bullish sector (59 percent), followed by energy (56 percent) and utilities (54 percent). At the asset class level, AI stocks lead all categories with 62 percent bullish, ahead of growth stocks (59 percent), domestic stocks (55 percent), and mega-cap tech (53 percent).
On the bearish side, real estate is the most out-of-favor sector at 43 percent bearish, followed by consumer discretionary (37 percent) and consumer staples (27 percent).
Optimism about corporate earnings and AI developments, each cited by 65 percent of active traders, is tempered by pessimism about inflation data (59 percent pessimistic) and geopolitical developments (51 percent pessimistic).
