US equity fund inflows eased before Fed decision and big tech earnings

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(Reuters) -U.S. equity fund inflows cooled significantly in the week to October 29 as investors refrained from taking major bets in the lead-up to an anticipated Federal Reserve rate cut and a batch of earnings reports from big technology companies.

Investors bought $1.81 billion worth of U.S. equity funds during the week, a sharp reduction from approximately $9.65 billion weekly net purchase the prior week, LSEG Lipper data showed.

The Fed trimmed interest rates by 0.25% as expected on Wednesday but signaled it could keep rates steady in December in absence of data from the federal government.

Meanwhile, Alphabet, Amazon and Apple delivered upbeat earnings commentary this week, while Meta Platforms and Microsoft’s spending plans disappointed investors.

The U.S. large-cap equity funds segment attracted a second successive weekly inflow, to the tune of $1.57 billion. Mid-cap and small-cap funds, however, saw $1.65 billion and $1.44 billion weekly outflows, respectively.

The technology sector, meanwhile, had a net $1.65 billion weekly inflow, the largest since October 1. In contrast, financials and consumer discretionary saw outflows of $662 million and $314 million, respectively.

Investors bought $4.91 billion of U.S. bond funds as they extended the trend of inflows into a fourth straight week.

They scooped up U.S. short-to-intermediate investment-grade funds and general domestic taxable fixed income funds of $1.72 billion and $1.47 billion, respectively, while divesting a net $1.23 billion worth of short-to-intermediate government and Treasury funds.

Money market funds saw inflows for a second successive week, valued at a net $1.46 billion.

(Reporting by Gaurav Dogra;Editing by Alison Williams)