An Analysis of US Investor Movements Amid Market Decline

Bank of America clients continued buying US stocks for the third consecutive week, despite the S&P 500 falling 1.6%.

Net inflows were limited, as ETF purchases offset most of the selling in individual stocks.

Retail investors were the primary driver of buying, posting their largest buying spree since May 2025.

Institutions continued buying primarily through ETFs, while hedge funds continued selling stocks for the second week.

Small-cap and micro-cap stocks saw strong demand and record inflows, while large-cap and mid-cap stocks came under selling pressure.

The technology sector saw its first outflows in three weeks, and the telecommunications sector continued to experience outflows.

Conversely, the consumer discretionary sector led inflows, while the financial and energy sectors saw notable buying.

In ETFs, investors favored growth, value, and diversified investment strategies over sector-specific investments, with outflows from most sector funds except for technology and industrials.

Share buybacks by companies increased compared to the previous week but remain below the historical average for earnings season and slightly below the levels seen in 2024 and 2025, although still above the levels of 2016–2023.

Despite the market downturn, investors, particularly individuals, continue to show confidence in US equities, with a clear focus on small-cap companies and sectors such as consumer staples, financials, and energy, while demand for technology and telecommunications stocks has declined compared to previous weeks.