The risk-off sentiment on Wall Street fueled the third-worst weekly outflow on record from U.S. equities, with technology shares falling out of favor.
U.S. stock funds bled $25.8 billion in the week through Sept. 23, in a reversal from the previous week’s biggest inflow in more than two years, according to Bank of America Corp. and EPFR Global data. Investors exited the hottest sector of the rebound, pulling the most money out of tech funds since June 2019.
While traders were buying the dip just a week ago, sentiment has switched firmly to risk off in recent sessions. Pessimism is seeping in about the prospect of further fiscal stimulus to support the world’s biggest economy.
In a flight to haven assets, investors are pulling out of equities, as well as cash, to put their money into debt and gold. Bond funds received $1.3 billion in the most recent week, while the precious metal attracted $1.4 billion in inflows, the most since the flash crash in early August, according to the BofA report. Stocks overall bled $22.8 billion, the most since March.
Still, strategists led by Michael Hartnett view this month’s market moves as a “healthy rather than dangerous correction.”