Big Funds Sell $51B in May, But Buybacks Cushion U.S. Stock Market

Large institutions accelerated their retreat from equities last month, unloading roughly $50.8 billion in U.S. shares, according to S&P Global.

May’s total was not only higher than April’s $30.9 billion outflow but also above the 12-month average of $42.7 billion. Analyst Thomas McNamara says the confluence of new tariff threats, lingering recession fears, and Moody’s downgrade of U.S. sovereign debt pushed many portfolio managers to cut risk.

Index and ETF investors stepped in on the other side, adding a net $11.1 billion in May. That buying was still well below their usual $30 billion monthly allocation, suggesting passive flows alone couldn’t fully counter institutional selling pressure. “It’s never truly zero-sum,” McNamara noted. “This time, corporate buybacks filled much of the gap, which is why the market held up despite weak long-only conviction.”

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Companies announced an estimated $170 billion in new repurchase authorizations last month, absorbing supply and muting volatility. In addition, defensive sectors such as health care and utilities drew relative inflows, while cyclical areas tied to global trade—industrial machinery and semiconductors—saw the heaviest dumping.

Even with the tug-of-war between sellers and buybacks, major benchmarks scarcely budged: the S&P 500 ticked up 0.25 %, the Nasdaq added 1.6 %, and the Dow slipped 1.4 %. The mixed performance reflects a market that is neither in full-blown flight nor convinced a fundamental growth rebound is imminent—setting the stage for potentially sharper moves once clarity on tariffs and the economic outlook emerges in the second half of 2025.

Alexander Stefanov

With over 8 years of experience in the cryptocurrency and blockchain industry, Alexander is a seasoned content creator and market analyst dedicated to making digital assets more accessible and understandable. He specializes in breaking down complex crypto trends, analyzing market movements, and producing insightful content aimed at educating both newcomers and seasoned investors. Alexander has built a reputation for delivering timely and accurate analysis, while keeping a close eye on regulatory developments, emerging technologies, and macroeconomic trends that shape the future of digital finance. His work is rooted in a passion for innovation and a firm belief that widespread education is key to accelerating global crypto adoption.