Investment in US stocks has plunged this month amid rising fears about weakening economic growth in the United States and globally, a new survey has found.
A survey of investors by Bank of America’s Global Research division said March has seen a “bull crash” in sentiment – one of the biggest-ever drops in exposure to US equities, because of concerns over stagflation, trade wars and the end of US exceptionalism.
The allocation to US stocks by fund managers has dropped to its lowest since June 2023. Nearly half of the respondents (44%) expected global growth to get worse, it said.
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Global investors raised their allocation to cash to 4.1% from 3.5%, ending a “sell signal” triggered in December, with the speed of the downturn in sentiment being “consistent with the end of equity correction,” BofA said on Tuesday.
Global growth expectations saw the second biggest drop on record, but, at the same time, allocation to euro zone stocks was the highest since July 2021, with banks becoming the world’s favourite sector, according to the survey.
The survey included 171 participants with $426 billion of assets under management, Reuters said.
Morgan Stanley chief investment officer Mike Wilson told clients on Sunday that “a tradable rally” was still possible. But he did not see a sustainable rally to new record highs “until the numerous growth headwinds are reversed” or the Fed resumes interest rate cuts.
Uncertainty around President Trump’s tariff policies and the artificial intelligence boom have been key factors in the downturn in sentiment, analysts say.
- Reuters with additional input and editing by Jim Pollard
NOTE: The headline on this report was amended on March 18, 2025.
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