Oct 2 (Reuters) – US equity funds recorded inflows for a second consecutive week through September 30, as continued enthusiasm over artificial intelligence and a cooler-than-expected inflation reading tempered concerns over rising Treasury yields.
Investors made net purchases of $20.6 billion in US equity funds during the week, compared with $37.49 billion the previous week, LSEG Lipper data showed.
Sustained AI demand lifted the Nasdaq Composite to record highs last week and supported US stocks this week, despite 10-year Treasury yields reaching 24-year highs. Micron Technology forecast revenue above estimates on Wednesday, signaling strong appetite for AI memory chips.
Meanwhile, a Commerce Department report on Wednesday showed that US inflation rose less than expected in August, while July price pressures were more moderate than initially reported, reducing the urgency for the Federal Reserve to raise rates again in October.
US large-cap equity funds attracted $19.33 billion, their second-largest weekly inflow in the past quarter. Multi-cap funds drew $1.01 billion and small-cap funds $223 million, while mid-cap funds recorded outflows of $329 million.
Sectoral equity funds, however, posted net weekly outflows of $4.1 billion, led by net sales of $3.79 billion in technology and $738 million in industrials.
US bond funds saw net weekly inflows of $6.45 billion, the largest in three weeks.
Short-to-intermediate government and Treasury funds drew $4.3 billion, their biggest inflow in four weeks. Investors also added $4.02 billion to general domestic taxable fixed-income funds, while withdrawing a net $2.28 billion from short-to-intermediate investment-grade funds.
Meanwhile, money market funds posted weekly outflows of $41.36 billion, marking their third week of net redemptions in the past four weeks.
(Reporting by Gaurav Dogra; Editing by Diti Pujara)
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