US equity funds record nine-month high outflows as oil stokes inflation fears

In a week marked by rising oil prices and heightened inflation concerns, U.S. equity funds experienced their largest outflows since December 2025, according to LSEG Lipper data. Investors poured a staggering $32.27 billion into selling U.S. equity funds, underscoring their growing apprehension over persistent inflation and potential interest rate hikes.

The surge in West Texas Intermediate crude futures, breaking past the $93.50 barrier and reaching a four-month high of $104.46, further fueled worries about the impact on inflation.

The U.S. producer price report released earlier in the week reinforced these fears, indicating that inflation remained elevated in August. U.S. large-cap funds were the most affected, with investors pulling a record $40.44 billion in net sales. Mid-cap funds also recorded significant outflows of $682 million, while multi-cap funds attracted a more modest $3.52 billion in disposals. Small-cap funds, however, saw inflows of $274 million.

Sectoral funds also saw varying trends, with technology and financials attracting inflows of $1.71 billion and $720 million, respectively. U.S. bond funds, on the other hand, recorded their 21st consecutive week of net purchases, amounting to $6.56 billion. Investors showed particular interest in short-to-intermediate investment-grade funds, which saw a record $3.75 billion in net purchases, their largest weekly inflow in nine weeks.

Meanwhile, U.S. money market funds experienced a notable outflow of $10.41 billion, following net purchases of about $48.76 billion the previous week.