(Bloomberg) -- Investors have slashed holdings of US equities by the most on record, according to Bank of America Corp.’s latest survey, underscoring the massive rotation that’s underway in global markets.

Fund managers reported being about 23% underweight in US stocks — a plunge of 40 percentage points from the previous survey. It’s a dramatic shift that shows how quickly traders have ditched their optimism about American markets with the S&P 500 tumbling some 8% from an all-time high in February.

“Peak US exceptionalism is reflected in record rotation out of US stocks,” strategist Michael Hartnett wrote in a note.

While high valuations and tepid economic growth have made investors jittery about the US, European markets are riding a wave of newfound optimism with Germany getting ready to unlock billions in defense and infrastructure spending.

Bank of America’s fund manager survey showed that the allocation to eurozone stocks is the highest since 2021. For the US, it’s the lowest since June 2023. The survey, which took place from March 7 to 13, included 171 participants with $426 billion in assets under management.

In another marker of investor caution, cash levels have risen to 4.1% from 3.5%, the biggest jump since 2020, according to the survey. Traditionally defensive plays, such as consumer staples, also registered an increase in allocations, while tech had a sharp decline.

The S&P 500 has bounced since falling into a 10% correction last week on the back of economic data that quelled concern about an imminent recession. US stock futures were down slightly in early Tuesday trading, with S&P 500 contracts slipping 0.2%.

Hartnett, the Bank of America strategist, said the swift deterioration in investor sentiment was consistent with the end of a correction in the US equity market. Still, he predicted that the S&P 500 would rise back above 6,000 points only if there was an easing in trade war and inflation concerns.

(Updates to add additional market context throughout.)