BofA clients sell tech stocks 4th week as outflows hit record low

BofA Securities institutional clients sold US stocks for a fourth consecutive week, with technology sector net inflows falling to a historic low, the bank's client data showed.

"Technology sector net inflows over the past four weeks have fallen to the lowest on record," Jill Carey Hall, a strategist at BofA Securities, said in a note dated June 26.

Clients sold stocks in nine of the 11 S&P 500 sectors, with technology and financials bearing the brunt. Individual stocks recorded $9.9 billion in outflows, the fourth-largest weekly exodus since 2008. Consumer staples posted net outflows for a seventh straight week, the longest streak on record. By contrast, small-cap and micro-cap stocks drew record inflows, while equity-focused ETFs attracted $4.2 billion.

The divergence between institutional selling and renewed retail buying — which turned net positive for the first time in six weeks — signals a potential rotation out of large-cap growth into smaller names. Corporate buybacks slowed to the lowest level since February, removing a key support mechanism for equities at a time when institutional selling is accelerating.

The selling pressure was broad-based but concentrated. Technology and financial sectors accounted for the largest outflows among the nine sectors that saw net selling. The four-week average net capital inflow into technology has dropped to a historic low, Hall noted, underscoring the depth of the rotation away from the sector that has led the bull market.

Institutional clients drove the selling for a fourth straight week, with the prior week's outflow already at a record. Hedge funds, by contrast, were net buyers during the period, while retail clients flipped to net buying after six weeks of selling — a divergence that suggests professional money managers are reducing risk while individual investors are stepping in.

The slowdown in corporate buybacks adds another layer of concern. Share repurchase activity fell to its lowest level since February, extending a five-week deceleration. Companies typically act as a stabilizing force during selloffs, and their reduced presence leaves the market more exposed to institutional selling pressure.

This article is for informational purposes only and does not constitute investment advice.