America’s Second-Biggest Bank Says the Stock Market Is in the Midst of a Multibillion-Dollar Stampede
Wall Street investors are fleeing stocks at a pace that has Bank of America scrambling to explain what is actually happening, and the real danger may not be the selling itself but where everyone is running for cover.
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 | BAC Price Prediction), 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.
| Sector | Bank of America Finding |
| Technology | Second-largest dollar outflow on record |
| Industrials | Record weekly outflow; 12 consecutive weeks of selling |
| Energy | Largest net inflows; first positive week in six |
| 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.
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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After two decades of patrolling the dark corners of suburbia as a police officer, Rich Duprey hung up his badge and gun to begin writing full time about stocks and investing. For the past 20 years, he’s been cruising the markets looking for companies to lock up as long-term holdings in a portfolio while writing extensively on the broad sectors of consumer goods, technology, and industrials. Because his experience isn’t from the typical financial analyst track, Rich is able to break down complex topics into understandable and useful action points for the average investor. His writings have appeared on The Motley Fool, InvestorPlace, Yahoo! Finance, Money Morning, and, of course, 24/7 Wall St. He has been featured in both U.S. and international publications, including MarketWatch, Financial Times, Forbes, Fast Company, and USA Today.
