U.S. equity funds registered a significant rebound in investor demand in the week ending May 13, with net inflows reaching $22.37 billion, the largest weekly net purchase since the $27.97 billion recorded in the week to April 22. Market participants pointed to a combination of a robust earnings season and bullish revenue guidance from semiconductor companies as supporting flows, despite evidence of rising inflation pressure.
Data from LSEG Lipper showed that expectations tied to semiconductor companies helped lift sentiment. Notably, optimistic sales forecasts from Advanced Micro Devices and Microchip Technology last week contributed to momentum that pushed the S&P 500 to a record intraday level of 7,517.12 on Thursday.
On the earnings front, LSEG coverage of 455 S&P 500 constituents indicated that roughly 83% of firms beat analysts' average profit estimates for the first quarter, a performance metric that reinforced investor confidence and helped drive allocations into equities.
Flow patterns were concentrated toward large-cap exposure: U.S. large-cap funds attracted $17.06 billion in net new money, the largest inflow for that category in six weeks. By contrast, mid-cap and small-cap segments experienced outflows of $1.25 billion and $2.53 billion, respectively, as investors favored larger, more liquid names.
Sector-level activity showed the technology sector benefited the most, recording record weekly net investments of $8.51 billion. The financials sector saw the opposite trend, with net redemptions totaling $1.37 billion during the same period.
Fixed income also captured investor attention. Aggregate bond fund inflows climbed to $12.9 billion, the highest weekly intake in three months. Within fixed income, U.S. short-to-intermediate investment-grade funds drew $4.02 billion, general domestic taxable fixed income funds took in $3.08 billion, and short-to-intermediate government and treasury funds attracted $2.14 billion.
Meanwhile, investors pulled $4.4 billion from money market funds in the week, reversing a substantial $113.53 billion net purchase recorded in the prior week. Market data snippets reflected short-term price moves for several instruments during the period, including US500 at -0.9%, Microchip Technology (MCHP) at -2.75%, Advanced Micro Devices (AMD) at -2.86% and SPSY at 0.00%.
The flow dynamics show a clear preference for large-cap and technology exposure amid an earnings backdrop in which the bulk of companies reported profits ahead of analyst averages, while investors also sought duration and credit exposure through targeted bond fund segments.