Global fund managers drastically reduced their holdings in US stocks during last week's market decline, according to research by Bank of America. The investors who were surveyed expressed concerns about the global economic growth outlook, with many fearing stagflation, a situation combining low growth and high inflation. The survey highlighted that 71% of fund managers anticipated stagflation impacting the global economy within the next year. The shift away from US equities toward international investments such as eurozone, UK, and emerging-market stocks was mainly due to worries about a potential economic slowdown. Many investors believe that the era of US dominance in the financial markets might be coming to an end, with 69% of fund managers indicating that US outperformance has peaked. As a result of this sentiment, fund managers are currently 23% underweight in the US equity market, the lowest level since June 23. Despite the cautious outlook, Bank of America analysts foresee a potential rebound in US stocks in the near future if concerns about inflation and trade tensions ease. They suggest that the S&P 500 could surpass 6,000 in the second quarter if these issues improve but caution that a recession could push the index below 5,000.