Last week (ending March 20), the S&amp;P 500 index fell 5.8% week-over-week, and the actual trading behavior of Bank of America Securities clients was more telling than the index's performance itself. During the week, individual stocks saw a net outflow of $8.3 billion, the fourth-largest weekly scale since 2008, and equity ETFs saw a net outflow of $1.1 billion, the highest in nearly six months. Combined, these two figures represent a rather rare and comprehensive sell-down.
According to the &#34;Chasing Wind Trading Desk,&#34; Bank of America Securities equity and quantitative strategist Jill Carey Hall noted this &#34;broad-based sell-off&#34; in her latest weekly flow report – nine out of eleven sectors experienced net outflows, with Financials, Energy, Consumer Discretionary, Consumer Staples, Utilities, and Materials all recording outflows at or near record levels. Communication Services saw net outflows for the first time since late last year. The only exception was technology stocks: a net inflow of $4.6 billion, marking the highest single-week record in Bank of America's data since 2008.
Looking at client structure, three client types showed rare divergence in direction. Institutional clients were the largest net sellers last week, having been net buyers for the previous three consecutive weeks; retail clients were net sellers for the second consecutive week; and hedge funds turned net buyers for the first time after four consecutive weeks of net selling. However, looking at the past 12 months, this divergence presents another perspective – hedge funds and institutional clients have been consistent net sellers, while retail clients have been the main net buyers. Last week's short-term actions were almost the opposite of this medium-term trend.
In terms of corporate buybacks, while the scale of buybacks accelerated week-over-week last week, buyback levels have remained below seasonal norms for the past 10 weeks when measured as a percentage of market capitalization. The rolling 52-week buyback as a percentage of S&amp;P 500 market cap has also fallen from a peak of 0.42% in late February this year to the current 0.22%. More noteworthy is that buybacks by Bank of America's corporate clients decreased by 17% year-over-year, while overall S&amp;P 500 buybacks still grew by 6% year-over-year in the third quarter of 2025 – historically, these two data series have been highly correlated. The persistence of this gap may indicate pressure for index-level buybacks to contract in the coming quarters.
<h2>Institutional Clients Reverse, Hedge Funds Take Over</h2>
Institutional clients accounted for the majority of the net outflows from Bank of America clients last week – net outflows for stocks and ETFs combined exceeded $11 billion, with stock-side outflows around $9.9 billion. This significant reversal last week was quite sudden after three consecutive weeks of buying.
Hedge funds were the sole net buyers last week, with net purchases of individual stocks amounting to $2.7 billion and net sales of ETFs around $0.9 billion, resulting in a net purchase of approximately $1.8 billion, ending a four-week streak of net selling.
Retail clients continued their net selling of individual stocks for the second consecutive week (approximately $1.08 billion), but maintained net buying in ETFs, resulting in a relatively limited overall net outflow.
Small-cap and micro-cap stocks faced a more persistent situation. Small-cap and micro-cap stocks have now recorded net outflows for 8 consecutive weeks, the longest sustained selling period across all market capitalization ranges.
<h2>Record Inflows for Tech Stocks, Historical Data Points to Future Outperformance</h2>
Last week, tech stocks saw a net inflow of $4.6 billion, the highest historical value in Bank of America's data since 2008, ranking 8th historically as a percentage of tech sector market capitalization. This figure emerged after clients had been net sellers of tech stocks for five consecutive weeks.
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The report traced back four similar historical situations – a reversal of equivalent scale following five consecutive weeks of selling. Subsequently, tech stocks outperformed the S&amp;P 500 by an average of 1.7 percentage points in the one-month and 6.0 percentage points in the three-month periods, respectively. In comparison, the overall average one-month/three-month excess returns for tech stocks were only +0.5ppt and +1.6ppt. Although the sample size is extremely small, the direction is consistent.
In contrast, the Financials sector has seen continuous net outflows every week since the beginning of this year, with cumulative net outflows of approximately $17.5 billion year-to-date in 2026, making it the sector with the largest cumulative outflows this year. Healthcare was the only sector, alongside Technology, that saw net inflows last week among the 11 sectors.
<h2>Energy ETFs and Stocks Diverge, Broad Market ETFs Abandoned</h2>
The divergence between ETF flows and individual stock flows was most evident in the Energy sector: Energy ETFs have seen almost continuous net inflows every week since the beginning of this year, with an additional inflow of $43 million last week; however, Energy stocks saw a net outflow of approximately $1.8 billion last week, among the largest declines across sectors. This &#34;buy the sector basket, sell the individual stocks&#34; operation indicates that investors maintained a directional exposure to the energy sector but were unwilling to bear the stock-picking risk of specific companies.
In terms of style, clients bought Growth and Value ETFs but significantly net sold Blend ETFs for the second consecutive week. By market capitalization, outflows were most pronounced in large-cap ETFs, while small-cap ETFs and broad market ETFs saw net inflows. Six sectors recorded ETF net inflows, with Financials, Technology, and Energy ranking in the top three; Materials ETFs experienced the largest net outflow.
<h2>Underlying Concerns in Buyback Data</h2>
Buybacks are a significant endogenous supporting force for the current US stock market, but related data are sending signals. From an industry distribution perspective, the two sectors with the largest corporate buyback amounts over the past 12 weeks have been Technology ($9.9 billion) and Financials ($6.6 billion), followed by Consumer Discretionary and Healthcare.
However, in aggregate, buybacks by Bank of America's corporate clients decreased by 17% year-over-year, showing a significant gap compared to the overall S&amp;P 500's +6% growth in the third quarter of 2025. Given their historical high correlation, if Bank of America's corporate client data is leading, then the overall buyback pace for the S&amp;P 500 may be about to weaken – this is a variable that cannot be ignored for a market highly dependent on its own buying power.

.SPX

As the S&P 500 plunged 5.8% for the week, Bank of America clients voted with their actions: individual stocks saw a net outflow of $8.3 billion, the fourth-largest weekly scale since 2008, with 9 out of 11 sectors experiencing sell-offs. However, tech stocks attracted $4.6 billion, a record high. Historically, after similar reversals, tech stocks have outperformed the broader market by an average of 6 percentage points within three months

- Last week, the S&P 500 index dropped 5.8%, with significant net outflows from individual stocks and ETFs totaling $8.3 billion and $1.1 billion, respectively.  
- Institutional clients were the largest net sellers, while hedge funds reversed a four-week trend and became net buyers for the first time.  
- Notably, technology stocks saw a record net inflow of $4.6 billion, suggesting a potential outperforming trend in the upcoming months amid declining buyback activities among corporate clients.

Tech Stocks Emerge as Sole Safe Haven Amidst Last Week's US Stock Sell-off