Investors withdrew $14.2 billion from US equity funds over the past three weeks, marking the largest outflow since January. Bank of America strategists Jared Woodard and Michael Hartnett noted that this trend reflects a shift in investor sentiment amid rising market volatility.
The outflow coincides with 30-year Treasury yields reaching their highest level since June 2007. Simultaneously, oil prices have surpassed $100 per barrel, driven by geopolitical tensions in the Middle East, which has heightened concerns regarding inflation.
Global stock fund inflows dropped from an average of roughly $52 billion per week in July to about $7 billion per week between late August and early September. Despite these figures, the S&P 500 continues to trade within a tight range near recent highs.
Data suggests that investors are rebalancing portfolios by moving capital from equities into bonds. BofA’s Bull & Bear Indicator has identified increased risks related to crowded positions in systematic trading strategies as the market remains skeptical about the returns on AI infrastructure spending.
