Retail investors have gone decidedly downbeat on US equities heading into the second quarter of 2026, according to a new Charles Schwab survey, while a separate measure of consumer economic sentiment suggests the mood is just as sour among the broader American public.
Schwab's Q2 2026 Retail Client Sentiment Report found that 58% of the firm's retail clients are now bearish on the stock market, up sharply from 41% in the first quarter. Bullish sentiment dropped by a nearly identical margin, falling to 28% from 41% over the same period. The last time Schwab's retail clients were this downbeat on equities was Q2 2025, when 61% were bearish and 27% were bullish.
Geopolitical and global macroeconomic worries topped the list of client concerns this quarter, cited by one in four respondents, the political environment in Washington came in a close second at 24%, while general market volatility uncertainty was cited by 9% of those surveyed.
Just 43% of clients now consider it a good time to put money into stocks, down from 49% in Q1, and only 39% said they feel better off financially than they did a year ago, roughly in line with Q1's 40% but well below the 55% who felt that way at the close of 2025.
The bearish shift in sentiment is unfolding against a backdrop of similarly subdued consumer confidence nationally.
The Penta-CivicScience Economic Sentiment Index fell 0.4 points to 30.6 in its latest biweekly reading, with four of its five component indicators declining — a notable stumble given that the measurement period included a strong jobs report, the confirmation of a new Federal Reserve chair, and a US-China trade and investment agreement.
Confidence in buying a home and confidence in personal finances both dropped 1.9 points, to 23.7 and 49.0, respectively, while confidence in making a major purchase and confidence in the overall US economy each fell 0.6 points.
However, despite the darkening mood around markets and the economy, the Schwab data reveals a striking resilience in how investors view their own financial trajectories.
Forty-nine percent of clients said they feel confident in their investment decision-making — actually up from 45% in Q1. And 89% said they remain at least somewhat confident they will reach their long-term financial goals.
"Short-term concerns and uncertainty can move market sentiment quickly, but bearish sentiment this quarter hasn't shaken our clients' confidence or engagement," said Jonathan Craig, Head of Retail Investing at Charles Schwab. "We continue to see strong client interaction with our platforms, professionals, and educational resources as clients navigate the markets and their portfolios. We're providing the information, tools and support investors need through a wide range of channels, enabling them to stay disciplined and stick to their plans when markets get noisy."
Of the 58% of clients who are bearish, nearly half said they have a plan in place to weather a market correction. And despite the gloomy sentiment, about four in 10 clients overall said they still intend to add money to their portfolios during the quarter.
Half of all Schwab clients expect inflation to reignite this quarter, while another 35% expect it to remain elevated and steady. Slightly more than half view the stock market as currently overvalued. Looking toward year-end, clients flagged geopolitical conflict (70%), oil prices (53%), and inflation (38%) as the forces most likely to drive market direction for the remainder of 2026.
Among the firm's active trader segment, sentiment is somewhat less bearish — 38% are bullish and 45% are bearish — but economic anxiety has intensified meaningfully. The share of traders anticipating a weakening labor market jumped to 67% from 55% in Q1, and those forecasting a recession this year rose to 39% from just 24% in the prior quarter.
Even so, traders are leaning into the volatility rather than stepping back. Eighty-two percent said they are very or somewhat likely to buy the dip should a notable market decline materialize.
"Traders see opportunities in every type of market, including downturns, so it's not surprising to see our trader clients continuing to lean in," said James Kostulias, Head of Trading Services at Charles Schwab. "When sentiment turns, we tend to see clients engaging in risk-off profit-taking—and that's not just a strong driver of engagement, it's smart trading. In fact, we see tremendous client engagement across the holistic spectrum of support we provide to traders including platforms, products, in-depth education and coaching for all skill levels, service and trading specialists, and – importantly – risk management tools to help clients trade with confidence."
Traders flagged geopolitical developments as the single greatest influence on their trading strategies this quarter at 76%, followed by inflation data (49%), Fed policy (40%), corporate earnings (40%), and AI developments (38%). On an asset-class basis, value stocks lead bullish preferences at 52%, ahead of AI at 47%, commodities at 44%, growth stocks at 42%, and domestic equities at 40% — though enthusiasm for both growth stocks and domestic stocks has cooled noticeably from Q1.
Younger investors are navigating the negativity in their own way. Schwab's Gen Z clients broadly track the bearish shift — 58% are bearish and 24% are bullish in Q2 — but they are also the most active and advice-seeking cohort in the survey. Sixty-two percent of Gen Z clients plan to add to their portfolios this quarter, with ETFs (46%) and individual stocks (37%) as their preferred destinations. More than a quarter of Gen Z clients said they plan to seek investing guidance or advice, a higher share than among Schwab's broader client base.
"We see a growing number of young people getting invested, with Gen Z representing roughly a third of Schwab's new clients, and they are doing it in a thoughtful way as we see in our data and our daily interactions with them," said Craig. "With so much investing information inundating young investors, they need trustworthy guidance, education, and resources to help them build positive investing behaviors. What these Gen Z clients tell us in our sentiment reports is backed up by their behaviors – one-third of retail households who created a financial plan with Schwab over the last two years are in their 20s or 30s. That's giving them the confidence to navigate all kinds of market cycles."
Schwab's Q2 2026 survey polled 1,128 retail clients and 1,415 active trader clients, all with at least $2,000 in retail assets, between March 24 and April 1. An additional oversample of 293 Gen Z clients was collected for generational analysis.
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