$50.2 billion in outflows from US equity funds in a week

The Federal Reserve’s decision to cut interest rates by 25 basis points last Wednesday caused panic on Wall Street, with US equity funds recording $50.2 billion in outflows in the week ending December 18, the largest since September 2009.

On Wednesday, December 18, when the Federal Reserve – the US central bank – cut interest rates, panic-driven selling returned to the forefront of the scene on Wall Street.

Large-cap funds saw outflows of $20.9 billion, ending a six-week streak of inflows, according to CNN.

Outflows in small-cap, multi-cap and mid-cap funds amounted to $5.4 billion, $3.9 billion and $2.9 billion, respectively.

Meanwhile, the volatility index — a popular measure of stock market expectations for volatility based on S&P 500 options — jumped 74% on Dec. 18, the second-largest increase in history. That’s even higher than the jumps seen in February 2007 and June 2020, and the index only saw a bigger daily jump on Feb. 5, 2018.