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

In the week ending September 9, 2025, U.S. equity funds experienced record outflows of $32.27 billion, marking the largest weekly withdrawal since December 2025, according to LSEG Lipper data. The decline was driven by concerns over the Iran conflict, which caused oil prices to soar, exacerbating fears of inflation and rising borrowing costs.

West Texas Intermediate crude futures jumped above $93.50 a barrel, reaching a four-month high of $104.46, intensifying worries about persistent inflation prompting the Federal Reserve to raise interest rates sooner than expected. U.S. large-cap funds saw an unprecedented $40.44 billion in outflows, while mid-cap funds recorded $682 million in sales.

Conversely, multi-cap funds saw inflows of $3.52 billion, while small-cap funds drew $274 million. U.S. sectoral funds, particularly technology and financials, attracted $1.71 billion and $720 million respectively. Bond funds continued their streak with a 21st consecutive week of net purchases amounting to $6.56 billion. Meanwhile, investors withdrew $10.41 billion from money market funds, following net purchases of $48.76 billion the previous week.