U.S. equity funds registered renewed net purchases of $1.03 billion in the week to July 1, according to LSEG Lipper data, a partial reversal of the $3.47 billion in net sales recorded the week before. The renewed inflow came as easing U.S.-Iran tensions and a pickup in demand for technology shares improved market sentiment, though investors remained guarded ahead of a widely watched payrolls report.
Sentiment was further influenced by a softer-than-expected June employment report showing the U.S. economy added 57,000 jobs in the month. That weaker jobs print trimmed market expectations for an additional Federal Reserve rate increase by year-end, a dynamic that appeared to support both equity and fixed-income allocations.
Sector flows were uneven. Technology sector funds drew $3.42 billion in net inflows, reversing the $19.97 billion in net sales seen the prior week. Financial and healthcare funds also attracted fresh money, taking in $1.96 billion and $1.47 billion, respectively. By market-cap and strategy, large-cap funds were the principal beneficiaries on the equity side, recording $7.2 billion in weekly inflows.
Not all equity categories saw buying. U.S. small-cap funds experienced $694 million of outflows, mid-cap funds saw $2.1 billion leave, and equity income funds recorded $1.33 billion in net redemptions.
Fixed income and cash equivalents also saw notable activity. U.S. bond funds attracted a net $9.88 billion, extending their run of weekly inflows to 11 straight weeks. Within taxable fixed income, short-to-intermediate investment-grade funds posted $4.22 billion of inflows, while general domestic taxable fixed income funds recorded $3.53 billion. Offsetting some of that demand, short-to-intermediate government and Treasury funds experienced $2.1 billion in outflows.
Cash management strategies picked up sizable allocations as well: investors placed $47.82 billion into money market funds, the largest weekly amount in four weeks. The flows across equities, bonds and money market funds suggest investors are balancing renewed risk appetite for tech and large-cap stocks with a continued preference for liquidity and duration management ahead of key economic data.