U.S. equity funds recorded their biggest weekly net withdrawals in nearly 2-1/2 months in the seven days ending March 18, driven by a shift in investor expectations after a series of macro signals. Higher oil price outlooks, an inflation reading that came in hotter than anticipated and a Federal Reserve stance described as cautious combined to erode hopes for policy rate cuts within the year.
According to LSEG Lipper data, investors divested a net $24.78 billion from U.S. equity funds during the week - the largest weekly net sales since $25.89 billion of withdrawals in the week to January 7. The exits were most pronounced from large-cap funds, which saw net redemptions of $36.11 billion, marking the biggest weekly outflow for that category since mid-September 2025.
Mid-cap funds recorded a net outflow of $606 million, while small-cap funds bucked the broader equity trend and attracted roughly $1.75 billion of net purchases.
Sector-level activity showed a modest reversal from the prior week. Sectoral funds collected a net $793 million in inflows after a week of net withdrawals, and investors directed roughly $1.55 billion into industrial sector funds - the largest weekly intake for that sector in six weeks.
Fixed-income and cash-equivalent vehicles drew meaningful new capital as investors recalibrated risk. Weekly net investments into bond funds rose to a five-week high, with roughly $11.53 billion flowing into these funds. Within that total, short-to-intermediate government and treasury funds saw a sizable weekly net purchase of $5.12 billion, and short-to-intermediate investment-grade funds attracted $3.9 billion.
Separately, money market funds continued to absorb cash, receiving a net $32.73 billion in the week. That marked a fifth straight week of net inflows into money markets, reflecting an ongoing demand for safe-haven liquidity amid the changing outlook for inflation and interest-rate policy.
This pattern of reallocations highlights how monetary policy signals and inflation surprises can quickly shift investor positioning across equities, fixed income and cash alternatives.