Investors funneled cash into U.S. equities at the third-highest pace in history last week, with Bank of America strategist Michael Hartnett framing it as a "correction, not a bear market," following four weeks of market turmoil.

What Happened: According to BofA Global Investment Strategy data highlighted by hedge fund consultant Seth Golden on Sunday, private client flows to equities reached approximately 2.5% of Assets Under Management in March, marking the "3rd largest weekly inflow to equities ever" from BofA clients.

"Markets stop panicking when policy makers start panicking," Golden, chief market strategist at Finom Group, noted on X, encouraging followers to "follow the fund flows."

The massive buying surge comes as U.S. stocks staged a sharp rebound on Friday when the S&P 500 tracked by The SPDR S&P 500 (NYSE: SPY) jumped 1.9%, eyeing its strongest daily rally since November. Despite this recovery, major indices remain on track for a fourth consecutive weekly decline – the longest losing streak since May 2022.

Why It Matters: Recent market volatility has been driven by recession concerns, with betting markets tracked by CFTC-regulated Kalshi showing the probability of a 2025 U.S. recession climbing to 37%. The Atlanta Federal Reserve's GDPNow model currently forecasts a 2.4% contraction in the first quarter, reversing from a 2.3% expansion in the fourth quarter of 2024.

Political factors may influence economic outcomes, as Commerce Secretary Howard Lutnick dismissed the Atlanta Fed's contraction forecast as "ridiculous." Meanwhile, analysts like Chris Zaccarelli of Northlight Asset Management question whether the President Donald Trump administration's economic policies will "lead to a recession or higher growth rates."

If the economy avoids recession, Jeff Buchbinder at LPL Financial suggests upside potential "may be as much as double the downside risk" over the next 9-12 months.

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