Investors are feeling the pressure as confidence in the stock market has plunged dramatically over the past month. The main driver of this downturn is President Donald Trump’s erratic introduction of tariffs, which has shaken the markets and sparked fears about economic growth. This insight comes courtesy of the Global Fund Manager Survey conducted by Bank of America, a key barometer on Wall Street.
This month, the survey recorded the steepest decline in investor confidence since March 2020, when the onset of the COVID-19 pandemic sent shockwaves through the stock market. Michael Hartnett, an investment strategist, dubbed this drop in confidence a “bull crash.” Notably, this month’s decline ranks seventh in magnitude over the last 24 years and has pushed investor sentiment to its lowest point in seven months.
The sentiment index factors in three main components: equity allocation, cash reserves, and expectations for economic growth. March saw the most significant reduction in U.S. equity exposure among major investors on record. At the same time, there was an unprecedented rush to increase cash holdings, reminiscent of the pandemic-triggered market crash in March 2020.
Additionally, the survey revealed the second-worst decline in global growth expectations since it began. Historically, this outlook closely aligns with the performance of the S&P 500, which suggests that deteriorating sentiment here spells trouble for stock prices, according to Hartnett.
From a contrarian perspective, Hartnett suggests that this sharp decline in sentiment might indicate that the worst of the recent market retreat is behind us. Still, he cautions that current positions don’t reflect an “extreme bear” market—one that would compel investors to adopt a “close-your-eyes-and-buy” strategy.
This feedback from Bank of America’s March survey comes at a time when investors are anxious about the future of U.S. stocks. The fears surrounding tariffs and subdued growth have rapidly led to a downturn from historical peaks. As of Tuesday, the S&P 500 is struggling to stay above correction territory, which marks a decline of at least 10% from a recent high.
