Investor confidence in the US stock market has surged to its highest level in at least two quarters, with nearly half of Charles Schwab's retail clients now describing themselves as bullish, marking a dramatic turnaround from the uncertainty that defined the spring.
Schwab's Q3 2026 Retail Client Sentiment Report found that 47 percent of retail clients are bullish on US equities, up sharply from 28 percent in Q2 2026. Among the firm's active trader clients including those who trade equities, options, futures, or forex, bullishness rose to 57 percent from 38 percent in the prior quarter. The survey was conducted June 16–23, 2026, among 1,123 retail clients and 1,100 active trader clients holding at least $2,000 in assets.
"The shift in client sentiment this quarter has been remarkable," said Jonathan Craig, head of retail investing at Charles Schwab. "Bullishness on the US stock market nearly doubled from Q2, and our clients backed that conviction with action, driving trading volumes up 57 percent year over year."
Forty-five percent of retail clients say they plan to add money to their investment portfolios in the next three months, and 49 percent say it is a good time to invest in equities, up from 43 percent in Q2.
Active traders are leaning in further: 84 percent said they are at least somewhat likely to buy any market dip over the next three months, and 41 percent describe themselves as at least somewhat risk-seeking.
For financial advisors monitoring client behavior, the data suggests a shift toward action. Trading volumes at Schwab climbed 57 percent year over year in Q2 2026; a figure that reflects client conviction in real dollars, not just survey responses. The firm reported $13.08 trillion in retail client assets and 39.8 million retail brokerage accounts as of Q2 2026.
James Kostulias, head of trading services at Charles Schwab, said trader clients have "leaned into the recent rally," while still monitoring inflation and geopolitics as ongoing risks.
The bullish turn has not erased anxiety about stretched valuations. Sixty-one percent of retail clients believe the stock market is currently overvalued, up from 52 percent in Q2, highlighting the tension between confidence and caution that many wealth managers are navigating with clients right now.
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.
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).
Gen Z investors: bullish, confident, and watching AI closely
Perhaps the most striking shift in the report involves Gen Z clients, whose bullishness on US equities nearly doubled from 24 percent in Q2 to 48 percent in Q3. Sixty-five percent of Gen Z respondents plan to add to their portfolios in the next three months, a higher rate than any other segment tracked.
ETFs are the vehicle Gen Z clients are most likely to move assets into (55 percent), and 94 percent say they are at least somewhat confident in achieving their long-term financial goals, up from 87 percent in Q2.
That said, concerns about an AI bubble are growing within this cohort: 25 percent of Gen Z clients flagged it as their top investing worry in Q3, up sharply from 12 percent in Q2 and Gen Z is the only segment that ranks AI developments above geopolitical conflict as the primary factor that will drive markets for the rest of 2026.
Craig noted that the firm "consistently" sees young investors "engaging proactively and intentionally with their investments," adding that they are "adding to their portfolios, seeking out guidance, growing their knowledge and developing their own points of view about the markets and economy."
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