US equity mutual funds recorded a net inflow of $20.6 billion for the week ending September 30, marking a second consecutive week of new money despite Treasury yields climbing to 24‑year highs. The inflow, reported by LSEG Lipper, was lower than the $37.49 billion that flooded the funds the week before, but it still reflects robust investor confidence.
AI enthusiasm drives market strength
Continued enthusiasm for artificial intelligence helped lift the Nasdaq Composite to record levels last week and kept US stocks buoyant this week. Micron Technology’s forecast of revenue above analysts’ estimates underscored strong demand for AI‑focused memory chips, reinforcing the sector’s growth narrative.
Inflation data eases rate‑rise concerns
A Commerce Department report showed that US inflation rose less than expected in August, and that July’s price pressures were more moderate than initially reported. The softer data reduces the urgency for the Federal Reserve to raise rates again in October, providing additional comfort to equity investors.
Fund flow details by market segment
Large‑cap equity funds attracted $19.33 billion, their second‑largest weekly inflow in the past quarter. Multi‑cap funds added $1.01 billion and small‑cap funds $223 million, while mid‑cap funds saw outflows of $329 million. Sector‑specific equity funds posted net weekly outflows of $4.1 billion, led by $3.79 billion withdrawn from technology funds and $738 million from industrials.
Bond and money‑market movements
US bond funds enjoyed net inflows of $6.45 billion, the strongest in three weeks, with short‑to‑intermediate government and Treasury funds drawing $4.3 billion—their biggest weekly addition in four weeks. Conversely, money‑market funds suffered outflows of $41.36 billion, marking a third week of net redemptions.
Overall, the data suggest that optimism around AI and a more tempered inflation outlook are helping investors stay the course in equities, even as Treasury yields remain elevated.
Original reporting: Appleton, WI News Feed (HLL/CB) — read the source article.
