US equity funds see weekly outflows on tariff worries, inflation pressure

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(Reuters) -U.S. equity funds again came under selling pressure through the week to July 16, dampened by worries over President Donald Trump’s tariff rhetoric and the buildup in inflationary pressure, potentially keeping the Federal Reserve cautious about a premature rate cut.

Investors jettisoned a net $11.75 billion from U.S. equity funds during the week, reversing their two successive weeks of net purchases, data from LSEG Lipper showed.

The large-cap fund segment was specifically under pressure as it witnessed a net $9.83 billion worth of divestments, the largest weekly figure since June 18.

Investors also made net withdrawals in the mid-cap and small-cap segments, with approximately $2.07 billion and $682 million worth of net disposals.

Sectoral funds saw a net $948 million worth of weekly sales, halting a two-week trend of inflows. The healthcare, tech and communication services sectors had noticeable outflows totaling a net $1.62 billion, $544 million and $324 million, respectively.

Bond funds, meanwhile, stayed popular for the 13th week in a row, attracting net inflows of $5.55 billion.

Investors added general domestic taxable fixed income funds worth $1.16 billion, extending net purchases into a fourth straight week.

Short-to-intermediate investment-grade funds and short-to-intermediate government and Treasury funds also saw net inflows of $863 million and $763 million, respectively.

U.S. money market funds, meanwhile, were out of favor for the second straight week, with a net $9.79 billion in outflows.

(Reporting by Gaurav Dogra in Bengaluru; Editing by Lisa Shumaker)