U.S. stock market sees first outflow since March. And that may set the stage for a risk-off summer.

Bank of America strategist Michael Hartnett argues that a first U.S. equity fund outflow since March may mark the start of a “risk-off summer.” U.S. stock funds saw $8.5 billion in withdrawals in the week to Wednesday, reversing a $119 billion inflow the prior week. The note says momentum in the Magnificent Seven has weakened, with the MAGS ETF down 14% from its May peak and a break below $60 seen as a key bearish signal. Hartnett expects investors could rotate away from megacap AI names toward semiconductors, small/mid caps, housing, and REITs, while noting that emerging markets remain a preferred long-term trade versus U.S. stocks. The piece also frames recent weakness in gold, silver, bitcoin, and the dollar as linked to easing geopolitical tensions and a stronger dollar, but says the broader backdrop still favors fractured geopolitics and populist policy. Overall, the article is a market-flow and positioning warning rather than a company-specific event.