Investors showed a clear preference for growth over value stocks in the U.S. market during the week ending Wednesday, according to BofA Global Research. The period coincided with unexpectedly stable inflation figures that prompted a decline in bond yields.
BofA’s weekly report on market flows highlighted significant trends, noting that U.S. growth stock funds attracted $1.8 billion in inflows while U.S. value stocks experienced outflows totaling $2.6 billion. EPFR data supported these observations.
The U.S. consumer price index for May, released on Wednesday, showed no change, leading to speculation that the Federal Reserve might reduce interest rates twice this year. In such an environment, growth stocks historically tend to outperform.
Alongside these equity shifts, investors also directed substantial funds towards safer assets. Cash saw a notable influx of $40 billion, while investments in U.S. Treasuries amounted to $1.8 billion and investment-grade bonds received $7.7 billion in purchases.
The Federal Reserve’s own announcement tempered expectations, revising its projected rate cuts to one for the year, down from an earlier forecast of three cuts in March.
