Investors significantly reduced their investments in US stocks in recent weeks amid concerns about global economic growth, according to Bank of America Corp. The allocation to US equities by fund managers dropped to about 23% below the average, marking the lowest level since June 2023. A survey conducted in March revealed that a net 44% of respondents anticipated a deterioration in global growth, a notable increase from the previous month.

Strategist Michael Hartnett noted that the negative outlook on global growth is unfavorable for stock performance. While US stocks experienced a correction, investors are now exploring opportunities in Chinese tech stocks and European markets, which have seen a boost due to a more positive economic outlook in the region.

Hartnett mentioned that the rapid decline in investor sentiment aligns with the end of the correction in the US stock market. However, he indicated that the S&P 500 would only surpass 6,000 points again if there is progress in resolving trade war tensions and inflation worries.

Last week, the strategist advised purchasing the S&P 500 at 5,300 points, a level around 7% below its current value. European stocks have outperformed US stocks this year, partly due to more attractive valuations. The survey by BofA, which gathered responses from 171 participants managing $426 billion in assets from March 7th to March 13th, revealed that a net 39% of global investors are now overweight on European equities, the highest proportion since mid-2021.