US equity funds see biggest weekly inflow in three months

(Reuters) – U.S. equity funds saw robust inflows after six straight weeks of outflows, on hopes that receding inflationary pressures would pause the Federal Reserve’s monetary tightening, while optimism over artificial intelligence bolstered interest in tech stocks.

According to LSEG data, investors poured a net $9.7 billion into U.S. equity funds in the seven days ended Sept. 13, their biggest weekly net purchase since June 14.

Data on Wednesday showed the annual rise in U.S. core inflation was the smallest in nearly two years in August, which solidified some expectations that the Fed would leave the rates unchanged next week.

Equity large-cap funds drew $13.42 billion, the biggest weekly inflow since March 22. Mid-cap funds also received $153 million, but multi- and small-cap funds saw net selling worth $1.53 billion and $405 million, respectively.

Among sectors, consumer discretionary and tech attracted inflows worth $957 million and $705 million, respectively. Consumer staples, however, faced about $770 million worth of outflows.

Tech stocks surged during the week as Morgan Stanley upgraded Tesla’s stock, saying its Dojo supercomputer could boost the company’s market value by nearly $600 billion. Meta Platforms also climbed after a report said it was working on a new, more powerful AI system.

Meanwhile, purchases in money market funds stood at just $9.37 billion during the week, compared with about $35.3 billion of inflows a week ago.

U.S. bond funds obtained $741 million, the first weekly inflow in five weeks.

Investors purchased U.S. short/intermediate government & treasury, and general domestic taxable fixed income funds of $1.21 billion and $495 million, respectively, but withdrew $930 million from short/intermediate investment-grade funds.

(Reporting by Gaurav Dogra and Patturaja Murugaboopathy in Bengaluru in Bengaluru; Editing by Shilpi Majumdar)