America’s Second-Biggest Bank Says the Stock Market Is in the Midst of a Multibillion-Dollar Stampede
Quick Read
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Bank of America clients sold a record $14.8 billion in individual stocks in one week, with industrials posting record outflows across 12 consecutive weeks of selling.
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Technology funds simultaneously attracted $18.8 billion in inflows that same week, exposing a sharply divided investor base rather than a clean exit from the sector.
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Fleeing into energy, healthcare, and consumer staples can create a secondary bubble when investors confuse a popular hiding place with a bargain.
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Wall Street’s love affair with artificial intelligence is running into an uncomfortable reality. After spending much of 2026 piling into AI stocks, investors are discovering that even revolutionary technology has a price ceiling. Rising borrowing costs, enormous data-center spending commitments, and questions about when those investments will pay off have sent traders looking for the exits.
But the selling is spreading far beyond the AI companies that started the trouble. Money managers are unloading stocks across entire sectors, raising the possibility that the market’s next big risk isn’t simply an AI bubble bursting — it’s the rush to escape one.
Bank of America Uncovers a $14.8 Billion Exodus
Bank of America (NYSE:BAC), the nation’s second-largest bank by assets, has put some remarkable numbers behind Wall Street’s retreat.
According to an October report from BofA Securities strategist Jill Carey Hall, the bank’s clients sold a record $14.8 billion worth of individual stocks in a single week, even as they purchased $2.8 billion in equity exchange-traded funds. The S&P 500 fell 1.9% during the reporting period.
The selling crossed nearly every major investor category. Institutional clients were net sellers for a third consecutive week, retail clients reversed two weeks of buying, and hedge funds sold stocks for the first time in five weeks.
The damage wasn’t confined to artificial intelligence.
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Sector |
Bank of America Finding |
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Technology |
Second-largest dollar outflow on record |
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Industrials |
Record weekly outflow; 12 consecutive weeks of selling |
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Energy |
Largest net inflows; first positive week in six |
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Healthcare ETFs |
Largest sector ETF inflows |
Source: BofA Securities Equity Client Flow Trends, October 2026.
The exodus from technology is understandable given growing concerns about whether Big Tech’s trillion-dollar AI spending boom will generate sufficient returns.
Yet the industrial selling suggests investors aren’t simply abandoning expensive chipmakers. They’re retreating from companies tied to the broader economic expansion, too.
24/7 Wall St.
A massive $14.8 billion sell-off is rocking the market, and the scramble for safety might be creating an even bigger bubble. © 24/7 Wall St.
The AI Bubble Is Creating a Second Danger
Surprisingly, the stock market isn’t seeing a universal flight from equities. Bank of America’s separate fund-flow data, compiled using EPFR Global figures for the week ended Oct. 21, showed technology funds attracting $18.8 billion, their strongest inflows since July.
That apparent contradiction reveals how divided investors have become. Bank of America’s client-trading figures show investors selling individual technology stocks, while broader fund-flow data show others continuing to buy the sector.
The selling has nevertheless accelerated. On Oct. 22, the Nasdaq Composite declined 2.6%, while semiconductor stocks lost approximately 6.7%.
The pressure extends to AI infrastructure spending. Billionaire Ken Griffin has warned that artificial intelligence is almost certainly a bubble, even as his Citadel investment firm maintains billions of dollars in AI-related holdings.
Ironically, the scramble for safety could create another problem. If everyone abandons expensive technology stocks for the same handful of defensive investments, those supposedly safer alternatives can become overpriced themselves. Energy, consumer staples, and healthcare may offer shelter from AI-related volatility, but their valuations still need to justify their earnings prospects.
A bubble inside a bubble is possible when investors confuse a popular hiding place with a bargain.
Key Takeaway
Bank of America’s numbers reveal genuine selling pressure, but they don’t establish that another stock market crash is inevitable.
The bank also noted that October historically brings heavy institutional tax-loss selling ahead of many mutual funds’ Oct. 31 fiscal year-end. Some of today’s selling could therefore reflect portfolio housekeeping rather than a fundamental rejection of stocks.
For long-term investors, the better approach is to examine portfolio concentration. The S&P 500’s growing dependence on a handful of technology giants means even index investors can carry more AI exposure than they realize. Stark evidence was on display yesterday: Two-thirds of the index’s stocks rose, but the index still closed in the red.
In short, don’t sell profitable businesses simply because Wall Street is running for cover. But don’t chase defensive stocks without checking their valuations, either.
The $14.8 billion stampede is a warning about investor behavior, not a verdict on artificial intelligence’s future. Smart investors should be looking for sound businesses trading at reasonable prices while everyone else is watching the exits.
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If you’ve saved over $1,000,000, this guide is for you. The last thing you want in retirement is to run out of money, you want your money to generate lasting income while you enjoy your life.
Now you can learn the strategies wealthy retirees use to fund their retirement with The Definitive Guide to Retirement Income from Fisher Investments. Download the guide today! (sponsor)
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