AI trading heat cools down, technology funds see record net outflow of $9.3 billion, first weekly outflow from US stocks in 3 months.

US stock funds suffered a net outflow of around $8.5 billion in the week ending June 24, marking the first weekly outflow in three months. Among them, tech sector funds saw a record $9.3 billion in net redemptions, indicating a cooling trend in the artificial intelligence trading frenzy. This trend sharply reversed from the previous week when tech funds saw an unprecedented $19.2 billion in net inflows, hitting a historical high. Bank of America Corp's strategy team, led by Michael Hartnett, pointed out in a report that the sharp reversal in fund flows reflects increasing divergence among investors on the valuation of tech stocks and the sustainability of the AI narrative. Recently, Wall Street has been under pressure, with a sell-off in large cap tech stocks intensifying and the stock price of Apple Inc. (AAPL.US) plummeting. Despite storage chip giant Micron Technology, Inc. (MU.US) easing concerns about a slowdown in the tech industry to some extent with strong sales forecasts, the S&P 500 index has significantly retraced from the historical highs reached earlier this month. Stock index futures suggest that US stocks may open soft again on Friday. Overall, US stock funds saw a total net outflow of around $5 billion. At the same time, money market funds also experienced a net outflow of around $25.5 billion. European funds continued to lose favor, recording net outflows for the 11th consecutive week. In contrast, investors are turning to fixed income products. Bank of America Corp's report shows that bond funds attracted around $16.6 billion in net inflows this week, highlighting a growing risk-averse sentiment in the market.