US equity funds report weekly inflows on trade deal optimism

US equity funds attracted inflows for the first time in three weeks in the week to July 30, fueled by optimism about a US-EU trade deal and an upbeat corporate earnings season so far.

Investors bought a net $6.34 billion worth of U.S. stock fund shares during the week, recording their largest weekly net purchase since July 7, LSEG Lipper data showed.

The S&P 500 and Nasdaq hit record highs on Thursday after strong earnings reports from Microsoft (NASDAQ:MSFT) and Meta Platforms (NASDAQ:META) but closed below those levels. Of the 317 S&P 500 companies that have reported earnings so far, 81% have beaten analysts’ estimates, exceeding the 76% average beat rate seen over the past four quarters, LSEG data showed.

The large-cap equity fund segment saw net inflows of $7.81 billion during the week after a three-week streak of net sales. However, small- and mid-cap funds saw net weekly sales of $3.9 billion and $35 million, respectively.

Sector funds gained a net $962 million for a second straight weekly buying. The financials and technology sectors attracted $650 million and $583 million in weekly inflows, respectively.

Meanwhile, investors poured $6.08 billion into U.S. bond funds, extending their buying into a 15th week.

They invested a net $1.99 billion in U.S. short- to medium-term investment funds in their biggest weekly purchase since July 2. Short- to medium-term government and financial funds, as well as municipal debt funds, also saw net inflows of $1 billion and $937 million. Meanwhile, money market funds saw $1.89 billion in withdrawals after a net weekly buying of $7.33 billion.