New York, November 14, 2025 – U.S. equity funds experienced a marked slowdown in investor inflows during the week ending November 12, as market participants expressed caution over elevated stock valuations and signs of weakening labour market conditions in October.

Investors purchased just $1.15 billion worth of equity funds, marking the smallest weekly net inflow since an outflow of $557 million during the week of October 15. The pullback comes amid concerns about the sustainability of the artificial intelligence-driven rally in U.S. equities and volatility in major technology stocks.

Market Valuation Concerns

The Nasdaq Composite Index (.IXIC) has fallen 4.8% since reaching an all-time high of 24,019.993 on October 29, prompting questions about whether tech sector valuations remain justified.

Mark Haefele, Chief Investment Officer at UBS Global Wealth Management, said that while equity valuations are elevated, they are well below levels seen in prior tech bubbles, with top tech firms trading at a 12-month forward multiple of 30 times, compared with over 70 times in 1999.

Fund Flow Breakdown

• Large-cap funds saw inflows slow to $2.35 billion, down from $11.91 billion the previous week.
• Mid-cap and small-cap funds experienced outflows of $1.36 billion and $889 million, respectively.
• Sector-focused funds reflected cautious sentiment, with technology funds receiving $1.74 billion, the smallest inflow in three weeks, and healthcare funds securing $777 million, the first weekly inflow in a month.

Investors also shifted their focus to fixed income:

• Bond funds attracted $8.96 billion in weekly inflows, nearly double the prior week’s $4.63 billion.
• Significant allocations went to short-to-intermediate government and treasury funds ($3.01 billion), investment-grade funds ($2.06 billion), and general domestic taxable fixed income funds ($1.96 billion).

Meanwhile, money market funds saw net outflows of $4.8 billion following three consecutive weeks of net purchases, indicating a rotation back into fixed-income instruments amid market uncertainty.

Outlook

Analysts note that this moderation in retail and institutional equity inflows could signal a cautious phase for the U.S. stock market, particularly as investors digest economic data and sector-specific trends. While AI-driven growth remains a factor, broader market valuation concerns and profit-taking in technology stocks are influencing investment strategies.