Robinhood Down 30%, Interactive Brokers Up 36% in 2026

The brokerage sector is witnessing one of the widest divergences of 2026 so far. Robinhood Markets (NASDAQ:HOOD) has fallen 30% year to date (YTD), while Interactive Brokers Group (NASDAQ:IBKR) has risen 36% YTD, a roughly 65-point spread heading into mid-May.

Reasons Behind the Divergence

The significant gap stems from fundamental differences in business models and clientele:

• Robinhood: Heavily reliant on retail traders and small investors, who tend to reduce activity in bearish markets, pressuring the company's order-flow-based revenue.
• Interactive Brokers: Targets professional traders and institutions, who maintain more stable trading activity regardless of market conditions. Its revenue is also more diversified (interest, trading, institutional services).

Stock Performance

HOOD stock closed at $79.05, reflecting a sharp decline since the start of the year. In contrast, IBKR continued its strong rally, delivering positive returns to investors.

Sector Context

Other brokerage stocks have not shown such extreme divergence. While some firms suffered from weak retail trading volumes, others benefited from higher interest rates boosting interest income.

What This Means for Investors

This divergence underscores the importance of understanding a brokerage's revenue model and customer base when investing. Firms focused on institutional clients may offer more stability in volatile markets, while retail-focused companies carry higher risk but greater growth potential in bull markets.