AI-Driven Market Rally Shows Signs of Fatigue as Equity Inflows Dip
The AI-fueled market rally is facing headwinds as U.S. equity fund inflows shrink to their lowest level in a month. Investors are growing wary of the sustainability of the tech-driven surge, with $1.15 billion flowing into U.S. equity funds during the week through November 12—the smallest weekly net investment since mid-October.
Tech stocks, once the darlings of the rally, have stumbled. The Nasdaq Composite Index fell 4.8% after peaking in late October, while large-cap funds saw inflows plummet from $11.91 billion to $2.35 billion. Small and mid-cap funds weren’t spared, shedding $889 million and $1.36 billion, respectively.
Weak labor market data and fading momentum in the AI sector have cast doubt on whether the rally can sustain its upward trajectory. The tech sector managed to attract just $1.74 billion, a fraction of its earlier appetite.
