Chart: Optimistic Sentiment Towards Artificial Intelligence Eases Yield Concerns, U.S. Stock Funds Record Net Inflows for the Second Consecutive Week

Reuters, October 2 - As of September 30, U.S. stock funds recorded net inflows for the second consecutive week, as investors' continued enthusiasm for artificial intelligence and lower-than-expected inflation data eased market concerns over rising Treasury yields.

Data from LSEG Lipper showed that investors' net purchases of U.S. stock funds for the week totaled $20.6 billion, compared to $37.49 billion in the previous week.

Despite the 10-year Treasury yield reaching a 24-year high, strong demand for artificial intelligence last week propelled the Nasdaq Composite Index to a record high and supported U.S. stocks this week as well. Micron Technology MU.O predicted on Wednesday (link) that its revenue would exceed expectations, indicating robust demand for AI memory chips in the market.

Meanwhile, a report released Wednesday by the U.S. Department of Commerce (link) showed that U.S. inflation in August rose less than expected, while inflation pressures in July were also milder than initially reported, reducing the urgency for the Federal Reserve to raise rates again in October.

U.S. large-cap stock funds attracted $19.33 billion, marking the second-largest weekly net inflow in the past quarter. Multi-cap funds saw inflows of $1.01 billion, small-cap funds attracted $223 million, while mid-cap funds experienced net outflows of $329 million.

However, sector stock funds posted net outflows of $4.1 billion for the week, including net sales of $3.79 billion in the technology sector and $738 million in the industrial sector.

U.S. bond funds saw inflows of $6.45 billion for the week, the highest level in three weeks.

Short- to intermediate-term government and Treasury funds attracted $4.3 billion, the largest inflows in four weeks. Investors also added $4.02 billion to general domestic taxable fixed income funds, while redeeming $2.28 billion from short- to intermediate-term investment-grade funds.

Meanwhile, money market funds saw $41.36 billion in outflows for the week, marking the third consecutive week of net redemptions in the past four weeks for this category.

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