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Investors made the “biggest ever” cut to their US equity allocations in March, as President Donald Trump’s erratic trade war sparked fears over the US economy and prompted a heavy Wall Street sell-off.

Allocations to US equities plunged 40 percentage points, from 17 per cent overweight in February to net underweight 23 per cent in March, according to Bank of America’s closely watched survey of fund managers. Over the same period, allocations to Eurozone stocks leapt to the highest level since July 2021.

According to BofA analysts, stagflation fears, the global trade war and an end of US exceptionalism have driven a “bull crash” in sentiment.

“It’s not surprising to see fund managers moving away from the US market,” said Trevor Greetham, head of multi-asset at Royal London Asset Management. “It’s priced for perfection and the policy coming out of the White House ain’t that.”

According to the survey, nearly 70 per cent of investors now say the “US exceptionalism” theme, which pushed the S&P and Nasdaq indices to record highs in the weeks after Trump’s election win in November, has peaked.

This abrupt shift comes as US stocks have tumbled since hitting a record high in February. The survey also showed that investors’ global growth expectations collapsed in March by the second biggest margin on record.

As well as US stocks broadly, investors were negative about tech and energy stocks, while they were more upbeat towards utilities and banking stocks.