Chart - Boosted by renewed optimism about the prospects of artificial intelligence, U.S. equity funds saw net inflows for the first time in five weeks.

Reuters September 25 - For the week ending September 25, driven by strong demand for artificial intelligence applications and data as well as a boost from oil prices (link) retreating from recent highs, U.S. equity funds recorded their first net inflow in five weeks.

Data from LSEG Lipper showed that investors made a net purchase of $37.6 billion in U.S. equity funds during the week, the largest single-week net inflow since June 17.

Funds investing in large technology companies saw strong demand, benefiting from the broad rally in tech stocks and wide adoption by consumers of the “Muse” smart assistant under Meta META.O (link)—an app that once topped U.S. app download charts.

However, as expectations rose for further monetary tightening by the Federal Reserve, the yield on the 30-year Treasury bond US30YT=RR soared to a 22-year high of 5.5016% on Thursday (link), dampening investor risk appetite.

U.S. large-cap equity funds saw an inflow of $36.62 billion, marking the largest single-week net inflow since June 24. Multi-cap funds also attracted $395 million in inflows, but mid-cap and small-cap funds saw outflows of $372 million and $1.02 billion respectively.

Among U.S. sector funds, investors injected $4.89 billion into technology funds, the largest weekly inflow since July 29. Investors also put $515 million into consumer discretionary funds, while redeeming $2.53 billion from financial sector funds.

Meanwhile, inflows into U.S. bond funds surged to $5.93 billion this week, up from around $562 million the previous week.

Investors bought $4.15 billion of domestic general taxable fixed income funds, the largest single-week net purchase since June 3.

Short- to intermediate-term government and Treasury funds, short- to intermediate-term investment-grade funds, as well as loan participation funds also recorded substantial inflows of $2.15 billion, $1.63 billion, and $1.31 billion respectively.

At the same time, money market funds attracted about $1.1 billion in net investments, ending two consecutive weeks of outflows.

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