Bank of America reports $14.2B withdrawn from US stock funds in three weeks

Investors have pulled $14.2 billion out of US equity funds over the past three weeks, according to Bank of America strategists. It’s the biggest withdrawal since January, and it didn’t happen in a vacuum.

The exodus coincides with Treasury yields climbing to levels not seen in years and oil prices pushing past $100 per barrel. When borrowing costs rise and energy gets expensive simultaneously, stock funds tend to feel the chill. This time is no different.

The numbers tell a clear story

The pace of money leaving US stocks looks even more dramatic when you zoom out. Global stock fund inflows averaged roughly $52 billion per week in July. By late August through early September, that figure had cratered to about $7 billion per week.

BofA strategists Jared Woodard and Michael Hartnett flagged the trend in their latest research note, warning that market volatility is likely to increase as investor caution deepens. The 30-year Treasury yield has reached its highest level since June 2007, which makes the risk-free return on bonds look increasingly attractive compared to the uncertainty baked into equities.

Oil prices clearing the $100-per-barrel threshold, driven largely by geopolitical tensions in the Middle East, have added to inflation fears. Higher energy costs feed into virtually every corner of the economy, from manufacturing to transportation to consumer spending.

Rebalancing, not panic

The S&P 500 has been trading in a tight range near its recent highs. There’s no broad market collapse accompanying these outflows.

Instead, the data points to something more nuanced: investors are rotating out of equities and into bonds. Bond funds have seen increased inflows over the same period, suggesting a deliberate portfolio rebalancing rather than a full-blown retreat from risk assets.

This pattern is consistent with behavior observed throughout 2026. Earlier in the year, US equity funds experienced multi-billion-dollar redemptions in both June and July before inflows resumed.

BofA’s Bull & Bear Indicator, which tracks positioning and sentiment across asset classes, has flagged growing risks from crowded positions in systematic trading strategies.

What’s driving the anxiety

With 30-year yields at their highest in nearly two decades, the opportunity cost of holding stocks has risen substantially. Oil prices surging past the $100 mark due to geopolitical instability in the Middle East introduces additional inflation risk that could force central banks to stay hawkish. US midterm elections are approaching, and markets historically experience elevated volatility in the weeks surrounding major political events.

Layered on top of all this is the ongoing debate about AI spending. Companies across the technology sector have been pouring capital into artificial intelligence infrastructure, and the market has been increasingly skeptical about when, or whether, those investments will generate returns proportional to their cost.

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