Key Facts
• Investors shifted funds from U.S. stocks to money market funds (MMFs).
• $28 billion (approx. ¥4.1 trillion) exited U.S. stocks in one week (ending August 6).
• MMFs saw inflows of around $107 billion, the largest since January 2025.
• Investment-grade and high-yield bond funds experienced the largest inflows since June 2020.
• S&P 500 index stalled after record highs due to labor market slowdown.
• New tariffs by President Trump took effect on August 7, raising economic concerns.
• Average U.S. tariff rate reached 15.2%, the highest since World War II.
• Federal Reserve (Fed) expected to cut policy rates by 100 basis points by mid-2026.
• BofA strategist Michael Hartnett highlighted investor focus on a “Goldilocks” scenario.
• Hartnett warned of potential stock market bubble in recent weeks.
Summary
Investors are withdrawing capital from U.S. stocks and reallocating it to money market funds (MMFs), according to a Bank of America (BofA) report based on EPFR Global data. Approximately $28 billion exited U.S. stocks in the week ending August 6, while MMFs saw inflows of $107 billion, marking the largest since January 2025. Bond funds also experienced significant inflows, the highest since June 2020. The S&P 500 index, which had recently reached record highs, has stalled due to signs of a slowing labor market. Additionally, new tariffs implemented by President Trump on August 7 have raised concerns about corporate earnings and economic growth. The average U.S. tariff rate now stands at 15.2%, the highest since World War II. Market attention is shifting to the Federal Reserve, with expectations of a 100 basis point rate cut by mid-2026. BofA strategist Michael Hartnett noted that many investors are betting on a “Goldilocks” scenario, where the economy avoids overheating or cooling. However, he has also cautioned about the potential for a stock market bubble in recent weeks.
