US equity fund outflows surge as investors dial down rate cut expectations

Group 1 - U.S. equity funds experienced the largest weekly net sales in nearly 2-1/2 months, with a net outflow of $24.78 billion, influenced by rising oil prices, unexpected inflation, and the Federal Reserve's cautious stance on interest rates [1] - Large-cap funds faced significant losses, with a net outflow of $36.11 billion, marking the highest weekly outflow since mid-September 2025 [2] - Mid-cap funds saw a net outflow of $606 million, while small-cap funds recorded approximately $1.75 billion in net purchases, indicating a divergence in investor sentiment across different market capitalizations [2] Group 2 - Sectoral funds experienced a net inflow of $793 million, driven by a notable $1.55 billion investment into industrial sector funds, the highest in six weeks [2] - Bond funds saw a surge in weekly net investments, reaching a five-week high with approximately $11.53 billion in inflows, indicating a shift towards fixed-income securities [3] - Short-to-intermediate government and treasury funds had significant net purchases of $5.12 billion, while short-to-intermediate investment-grade funds attracted $3.9 billion in net investments [3] - Money market funds recorded a net investment of $32.73 billion, reflecting ongoing safe-haven demand for the fifth consecutive week [3]