.png)
According to a recent Bank of America survey, Wall Street fund managers are buying stocks at the fastest pace in seven months. This renewed optimism is driven by diminishing fears of a trade war and the belief that central banks are finished hiking interest rates. Consequently, investors are moving their cash into equities, particularly large US tech firms like the "Magnificent 7," fuelled by expectations of future rate cuts and confidence in AI.
The big money on Wall Street is changing its tune. According to the latest Bank of America Global Fund Manager Survey1, professional investors are the most optimistic on global equities investing they’ve been since February, snapping up stocks at a rate not seen in seven months.
So, what's behind this sudden surge of optimism?
Two big fears have faded
Previous months’ data has reflected fears in the market of a global recession triggered by a trade war, and central banks hiking interest rates to tackle inflation. September’s data shows that fund managers believe the worst of both threats is now in the rearview mirror.
- Fears of a trade war are rapidly diminishing. This has caused the biggest one-month jump in global growth expectations in nearly a year.
- Investors are now betting heavily on the Federal Reserve starting to cut interest rates. With inflation concerns easing, 47% of managers expect the Fed to cut rates four or more times in the coming year. Cheaper borrowing costs tend to boost stock market growth, and managers are positioning their portfolios accordingly.
So, what are they buying?
The survey shows that cash levels remain low, meaning these giant funds are holding back less of a safety net for unforeseen changes.
The destination for much of this cash is the "Magnificent 7" — the huge US tech firms like Apple, Microsoft, and NVIDIA that have become household names. It's a powerful vote of confidence in the biggest growth drivers of the global economy.
Managers are backing AI with 48% of respondents thinking “AI stocks are not in a bubble” and 50% said “AI is already increasing productivity”.
How you can get involved with Chip
Investing with Chip gives you access to a curated range of investment funds. These funds give you access to a basket of assets, including the global and tech stocks mentioned here — but you won’t need to pick the winners. Funds like the S&P 500, NASDAQ 100, and FTSE All-World track the price of hundreds of companies, with the “Magnificent 7” stocks currently leading these indexes.
Start investing from £1. Open a Stocks & Shares ISA or General Investment Account, and you can get started in a few simple steps!
When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than your original investment. Seccl Custody Limited is the ISA Manager for the Chip Stocks and Shares ISA. ISA limits apply. Invest £20k per tax year. Chip does not provide tax or financial advice. Tax treatment depends on individual circumstances and may be subject to change in the future.
Important to know: When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than your original investment.