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AI Enthusiasm Fuels US Equity Inflows Amidst Yield Fears
2 Oct
Summary
- US equity funds saw inflows for a second week, totaling $20.6 billion.
- Continued AI excitement boosted stocks despite rising Treasury yields.
- Cooler-than-expected inflation data eased concerns about rate hikes.
US equity funds attracted investor interest for a second successive week, with net purchases amounting to $20.6 billion through September 30.
This sustained inflow was largely driven by ongoing enthusiasm for artificial intelligence technologies, which propelled the Nasdaq Composite to record highs.
Despite 10-year Treasury yields reaching 24-year highs, investor sentiment remained relatively positive.
Market optimism was further bolstered by a report indicating that US inflation rose less than anticipated in August.
July's inflation data was also revised downward, reducing immediate pressure on the Federal Reserve to implement another rate hike.
US large-cap equity funds were a primary recipient, drawing $19.33 billion.
However, sectoral funds, particularly technology and industrials, saw net outflows totaling $4.1 billion.
Concurrently, US bond funds experienced inflows of $6.45 billion, the largest in three weeks, with government and Treasury funds seeing substantial additions.
