During last week's sell-off in the US stock market, technology stocks became the only safe haven.

Ask AI · After Record Inflows Into Tech Stocks, How Do Historical Samples Signal the Outlook?

Last week (as of March 20), the S&P 500 index fell 5.8% for the week, but the actual trading activity by Bank of America Securities clients tells the story even more clearly than the index’s own move. Net outflows from individual stocks that week totaled $8.3 billion, the fourth-largest single-week decline since 2008; net outflows from stock ETFs were $1.1 billion, the highest in nearly six months. Taken together, the two data points amount to a fairly rare, broad-based de-risking.

According to the Pursuit Trading desk, Bank of America Securities stocks and quantitative strategist Jill Carey Hall recorded this “broad-based selloff” in their latest weekly fund-flow report—9 of the 11 sectors saw net outflows. Financials, energy, discretionary, consumer staples, utilities, and materials all logged outflows that were either record-setting or near record levels, while communication services posted net outflows for the first time since late December last year. The only exception was tech stocks: net inflows of $4.6 billion, the highest single-week figure in Bank of America’s data since 2008.

By client composition, three types of clients rarely diverged in direction. Institutional clients were the largest net sellers last week; they had already been net buyers for the prior three weeks. Private clients were net sellers for the second straight week. Hedge funds, after net selling for four consecutive weeks, flipped to net buying for the first time. But if you extend the horizon to the past 12 months, this divergence shows another side—hedge funds and institutional clients have continued to accumulate net selling, while private clients have been the main net buyers. Last week’s short-term move was almost completely the opposite of the direction of that broader, mid-term pattern.

On share repurchases, the buyback pace accelerated week over week last week, but measured by market-cap share, the trailing 10-week buyback level has remained below the seasonal normal. The 52-week rolling buybacks as a percentage of S&P 500 market cap also slid from this year’s late-February peak of 0.42% to the current 0.22%. Even more noteworthy is that Bank of America corporate clients’ buybacks are down 17% year over year, while the S&P 500’s overall buybacks were still up 6% year over year in the third quarter of 2025—historically, these two series are highly correlated. If this gap persists, it may signal downward pressure on buybacks at the index level over the coming few quarters.

Institutional clients turn around; hedge funds step in

Among Bank of America clients’ net outflows last week, institutional clients drove most of it—combined net outflows from single stocks plus ETFs exceeded $11 billion, including about $9.9 billion from the stock leg alone. After three weeks of continuous buying, last week’s sharp reversal was quite sudden.

Hedge funds were the only net buyers last week: net buying of $2.7 billion in individual stocks, net selling of roughly $0.9 billion at the ETF level, resulting in combined net buying of about $1.8 billion—ending the prior streak of four consecutive weeks of net selling. Private clients were net sellers in individual stocks for the second straight week (about $1.08 billion), but they still stayed net buyers at the ETF level, so the overall net outflow size was relatively limited.

Small-cap and micro-cap stocks faced an even more persistent situation. Current small- and micro-cap stocks have recorded net outflows for 8 consecutive weeks, the longest sustained selling streak among all market-cap ranges.

Record tech inflows; historical samples point to outperformance ahead

Tech stocks saw net inflows of $4.6 billion for the week, the highest historical value in Bank of America’s data since 2008, ranking 8th when calculated by tech sector market-cap share. This figure appeared after clients had been net selling tech stocks for five straight weeks.

The report traces four similar instances in history—cases where, after selling for five straight weeks, an upside reversal of the same magnitude of buying followed immediately. After that, tech stocks averaged outperformance versus the S&P 500 by 1.7 percentage points over a 1-month horizon and by 6.0 percentage points over a 3-month horizon, while tech stocks’ overall average excess returns over 1-month/3-month were only +0.5ppt and +1.6ppt, respectively. The sample size is very small, but the direction is consistent.

By contrast, the financial sector has posted net outflows every week since the start of this year; cumulative net outflows through 2026 to date are about $17.5 billion, the largest cumulative outflow among all sectors so far this year. Healthcare was the only sector among the 11 that was net bought in sync with tech last week.

Energy ETFs and stocks diverge; large-cap ETFs get ditched

The divergence between ETF flows and stock flows is most pronounced in the energy sector: energy ETFs have seen nearly every-week continuous net inflows since the start of this year, and last week they continued to receive inflows of $43 million. But energy stocks had net outflows of about $1.8 billion last week, with the drawdown ranking among the top in all sectors. This “buy the industry basket, sell the individual stocks” approach suggests investors maintained directional exposure to the energy sector, but were unwilling to take on the stock-picking risk of specific companies.

On the style dimension, clients bought growth and value ETFs, but for the second consecutive week they heavily net sold Blend ETFs. By market-cap classification, outflows from large-cap ETFs were the most significant; small-cap ETFs and broad-market ETFs were net bought. Six sectors recorded net ETF inflows, with financials, tech, and energy ranking among the top three; the materials ETF faced the largest net outflows.

A hidden risk in buyback data

Buybacks are an important endogenous support force in today’s U.S. equities, but the related data is sending signals. From an industry distribution perspective, the two sectors with the largest corporate buyback amounts over the past 12 weeks were technology ($9.9 billion) and financials ($6.6 billion), followed by discretionary and healthcare in sequence.

However, on total volume, Bank of America corporate clients’ buybacks are down 17% year over year, which contrasts sharply with the S&P 500’s +6% growth pace in the third quarter of 2025. Because the two series have historically high correlation, if Bank of America corporate-client data is leading, then the S&P 500’s overall buyback cadence may be weakening soon—this is not a variable that a market that heavily relies on company-level buying can afford to ignore.