New York: U.S. equity funds witnessed a notable resurgence in investor interest last week, attracting substantial inflows as market participants positioned themselves ahead of the much-anticipated mega-cap earnings season. This optimism emerged despite lingering concerns over geopolitical tensions and recent tariff threats issued by President Donald Trump.
Data from LSEG Lipper revealed that U.S. equity funds recorded $10.73 billion in net inflows for the week ending January 28, reversing the previous week’s outflows of approximately $5.25 billion. Analysts suggest that this renewed confidence reflects the expectation that strong earnings from large-cap technology and financial firms could provide a stabilizing boost to the equity markets.
Sector-specific equity funds attracted significant attention, drawing a combined $6.07 billion in net weekly investments the highest weekly inflow recorded since at least 2022. Among these, the technology sector led with $1.72 billion, followed closely by financials at $1.44 billion and metals & mining at $1.39 billion. These inflows indicate investor confidence in both growth-oriented and cyclical sectors as corporate earnings results approach.
The rebound in fund flows extended beyond equities. Bond funds continued their streak of net purchases for a fourth consecutive week, registering $13.16 billion in inflows. Short-to-intermediate investment-grade funds, general domestic taxable fixed income, and municipal debt strategies were the primary beneficiaries, attracting $5.31 billion, $3.28 billion, and $2.06 billion, respectively.
Meanwhile, money market funds ended a two-week period of net outflows, drawing $9.64 billion in fresh capital. Financial analysts interpret this as investors’ cautious approach to maintain liquidity while staying partially exposed to market opportunities.
The latest surge in U.S. equity fund investments underscores a shift in investor sentiment from the defensive positioning seen earlier in January, when geopolitical uncertainty and tariff concerns led to widespread equity fund outflows. Market watchers note that the upcoming corporate earnings season, particularly results from mega-cap companies, will be critical in shaping market momentum for the weeks ahead.
As U.S. investors recalibrate portfolios in anticipation of these earnings announcements, fund managers remain alert to how corporate performance and macroeconomic signals could influence broader market trends.