US Equity Funds See $11.8 Billion Inflow, Ending Two-Week Outflow Streak

U.S. equity funds attracted a net $11.83 billion for the week ending July 29, snapping a two-week streak of withdrawals as investors bought into a recent dip in technology stocks following strong corporate earnings. The inflows, reported by LSEG Lipper, more than reversed the combined $10.68 billion that investors had pulled from the funds over the prior two weeks.

Tech Earnings Bolster Investor Confidence

The shift in sentiment was largely driven by robust earnings reports from Microsoft and Amazon, which helped alleviate concerns over heavy capital spending that had surfaced after results from Alphabet and Tesla. The positive news helped lift the S&P 500 by 1.66% during the period.

"Microsoft indicated further acceleration in cloud revenue growth for the current quarter, while Alphabet reported an increase in advanced cloud orders that have yet to be recorded as revenue," said Mark Haefele, chief investment officer at UBS Global Wealth Management, as cited by Reuters. "We remain constructive on the AI growth story."

Large-Caps Dominate as Smaller Stocks See Outflows

Investor appetite was heavily concentrated in the largest U.S. companies, highlighting a preference for established players over smaller, potentially riskier assets.

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• U.S. large-cap funds recorded their largest weekly net purchase since June 24, attracting $11.57 billion.
• In contrast, mid-cap funds saw outflows of $2.29 billion.
• Small-cap funds experienced more modest withdrawals of $196 million.

Sector Flows and Fixed-Income Trends

The technology sector was the primary beneficiary of the renewed buying, drawing in $4.9 billion—its largest weekly inflow since July 8. Financials and consumer staples also saw net purchases of $1.96 billion and $751 million, respectively.

Meanwhile, demand for fixed-income assets appeared to wane, with inflows into U.S. bond funds slowing to a 15-week low of $1.34 billion. In a sign of increased risk appetite, money market funds, often considered a proxy for cash, recorded a third consecutive week of outflows, with investors pulling a net $11 billion.