BofA Warns of Increased Stock Volatility Amid US Equity Outflows
Bank of America strategists have warned that rising volatility in U.S. stocks is likely due to recent outflows from equity funds and complacency among policymakers regarding increasing Treasury yields. According to BofA, $14.2 billion has been withdrawn from U.S. stock funds over the past three weeks—the largest such outflow since January 2026—while global inflows have also slowed significantly compared to earlier in the year. Despite these signs of investor caution and rising commodity prices, there is no visible panic among markets or policymakers. The Federal Reserve remains data-dependent on its interest-rate decisions even as oil exceeds $100 per barrel and diesel hits record levels. BofA analysts argue that this combination of complacent market behavior and assertive policy could lead to increased volatility. The S&P 500 has remained in a tight range since hitting an all-time high about a month ago, with rising but still-contained volatility. Uncertainty around monetary policy, U.S. midterm elections, the ongoing conflict in Iran, and concerns over AI spending are contributing factors.
Tickers: $BAC
Topics: Federal Reserve policy outflows stock volatility Treasury yields