Texas is continuing to stake a claim as a rival to Wall Street as a key financial hub in the United States, with Gov. Greg Abbott on Tuesday saying his state has a “stronger brand than New York.”
“Capital Markets are realizing that the place to be is Texas,” Abbott said on CNBC’s “Squawk Box.”
Abbott’s comments come as Texas continues to emerge as a financial center, complete with its own stock exchange. The Texas Stock Exchange plans to launch in 2026 and recently announced several key hires for its exchange-traded products business.
The financial industry’s leading companies are also working to increase their presence in the Lone Star State. The New York Stock Exchange announced in February it would relocate its Chicago operations to Texas, and on Tuesday, Nasdaq announced it will open a regional headquarters in Dallas.
“Nasdaq is deeply ingrained in the fabric of the Texas economy, and we look forward to maintaining our leadership as the partner of choice for the state’s most innovative companies,” Adena Friedman, Nasdaq CEO, said in a press release.
Trading at most major stock exchanges around the world, including the NYSE and Nasdaq, is done almost entirely electronically. Stocks can trade on multiple exchanges in different locations although they have one designated primary listing.
Texas is also making a play to rival Delaware as a legal home to major companies, touting a more business-friendly legal environment. That includes making it harder for small shareholders to sue companies, as happened to Tesla in Delaware in a legal fight over CEO Elon Musk’s compensation. Tesla has since shifted its state of incorporation to Texas.
“A guy who had the [stock holdings] value of less than a Tesla vehicle was able to try to upend the entire corporate practice of the Tesla company,” Abbott said Tuesday. “That’s just wrong. What we are trying to codify in Texas is ownership of at least 3% of a business before a derivative action can be brought against a company.”
Individual investors, whose assets are more tied to the stock market than ever, have abandoned their tried-and-true dip-buying mentality as the S&P 500 recently fell into a painful, 10% correction.
Retail outflows from U.S. equities rose to about $4 billion over the past two weeks as tariff chaos and mounting economic concerns caused a three-week pullback in the S&P 500, according to data from Barclays. During March’s sell-off, 401(k) holders have been aggressively trading their investments, to the tune of four times the average level, according to Alight Solutions’ data going back to the late 1990s.
“If people were trying to buy the dip and get their stocks on sale, maybe you would see people actually buying large-cap equities. But instead we see people selling from large cap-equities,” said Rob Austin, director of research at Alight Solutions. “So this does appear to be a bit of a reactionary trading activity.”
The increased selling came as American households are more sensitive than ever to the turbulence in the stock market. U.S. household ownership of equities has reached a record level, amounting to nearly half of their financial assets, according to Federal Reserve data.
Dip-buying had served investors well over the past two years as Main Street rode the artificial intelligence-inspired bull market to record highs. At one point, the S&P 500 went more than 370 days without even a 2.1% sell-off, the longest such stretch since the global financial crisis of 2008-2009.
Nut lately, markets began to sour as President Donald Trump’s aggressive tariffs and sudden changes in policy stirred up volatility, stoking fears of dampened consumer spending, slower economic growth, weaker profits and maybe even a recession. The S&P 500 officially entered a correction late last week, and is now sitting some 8.7% below its February all-time high.
S&P 500
Still, retail traders are far from throwing in the towel. For example, the net debit of margin accounts, a “popular proxy for retail investors’ sentiment,” continues to stay elevated, according to Barclays data.
“There is plenty of room for retail investors to further disengage from the equity market,” analysts led by Venu Krishna, Barclays head of U.S. equity strategy, said in a note Tuesday to clients. “We are of the view that retail investors have in no way capitulated.”
Barclays’ proprietary euphoria indicator shows sentiment has been brought down to levels similar to where it was around the time of the U.S. presidential election in November, but is still high by historic standards.
“It’s not like everybody is going out there saying the sky is falling. Most people, it looks like, are not making any sort of reactions,” Austin said.
Check out the companies making headlines in midday trading. Tesla — Elon Musk’s EV company saw shares sliding another 3.9%, bringing month-to-date losses to a whopping 23%. The sell-off came after Tesla’s China rival Zeekr said it is rolling out advanced driver assistance-system for free . Meanwhile, RBC Capital Markets lowered its price target on Tesla amid lowered expectations around pricing for the the company’s self-driving capabilities. Alphabet — Shares of the Google parent slid 2.7%. Google said on Tuesday that it signed a definitive agreement to acquire cloud security startup Wiz for $32 billion in an all-cash deal. This deal is slated to be Google’s largest-ever acquisition. Palantir — Shares slid 2.4%, putting their month-to-date losses at around 6%. Jefferies also reiterated the defense technology stock as underperform , saying valuation remains a concern. Nvidia — The chipmaker retreated 1.7% ahead of the CEO Jensen Huang’s keynote speech at the company’s GTC AI Conference. Lucid — The electric vehicle stock climbed 14% following Morgan Stanley’s upgrade to equal weight from underweight. Morgan Stanley said Lucid has an emerging bull case tied to artificial intelligence. Sarepta Therapeutics — The biotechnology company plunged 20% after disclosing the death of a man who was treated with its Elevidys gene therapy. Sarepta said in a statement that acute liver injury is a known potential side effect. Eastman Kodak — Shares of the film and chemicals manufacturer fell 4.6% after the company reported mixed fourth-quarter results. Eastman Kodak posted consolidated revenues of $266 million, compared with $275 million for the fourth quarter of 2023, reflecting a 3% decrease. The company reported a jump in net income for the fourth quarter, however, generating $26 million in net income for the quarter. That’s up from $5 million in the year-ago period. Peabody Energy — The coal mining company advanced 3.7% after President Donald Trump, writing on his social media platform Truth Social , said he is authorizing energy production using coal. Willis Tower Watson — The commercial insurance stock climbed 2% on the heels of UBS’ upgrade to buy from neutral. UBS said the company has seen faster improvement on operating and free cash flow margins than peers. Millrose Properties — The residential land developer popped nearly 10% after the company declared a dividend and issued new guidance. Millrose will pay shareholders 38 cents per share. It added that it sees fiscal second-quarter earnings per share between 65 cents per share and 68 cents. Hims & Hers Health — The digital health stock tumbled 8% after the Food and Drug Administration shared concerns around unapproved GLP-1 drugs used for weight loss, including compounded versions. Hims & Hers began prescribing compounded semaglutide last year. — CNBC’s Brian Evans, Pia Singh, Yun Li and Fred Imbert contributed reporting.