US equity funds record second weekly outflow on Iran tensions, high yields

U.S. equity funds recorded outflows for a second consecutive week, as rising bond yields and oil prices amid renewed Middle East tensions weighed on sentiment, though strong results from AI-related companies helped limit the selloff.

Investors withdrew a net $11.12 billion from U.S. equity funds in the week through September 2, compared with $22.72 billion in net outflows in the previous week, according to LSEG Lipper data.

Bond yields and oil prices surged earlier this week as the U.S. struck Iranian military targets near the Strait of Hormuz, while Tehran said it had targeted U.S. assets across the region.

Strong results from Nvidia and Dell Technologies, however, signaled that the AI spending boom and related market trade remain intact.

U.S. large-cap equity funds recorded net outflows of $7.52 billion, easing from $24.73 billion in net sales the previous week. Mid-cap funds saw outflows of $572 million, while small-cap funds recorded outflows of $1.83 billion.

Sectoral funds reported net selling of $3.48 billion for the week, led by technology, financials and industrials. Technology recorded net withdrawals of $1.39 billion, followed by $1.31 billion and $620 million in financials and industrials, respectively.