In the week ending July 30, 2025, U.S. equity funds experienced a net inflow of $6.34 billion, marking the first weekly inflow in three weeks. This surge was driven by optimism surrounding a potential U.S.-EU trade deal and strong corporate earnings reports. The S&P 500 and Nasdaq reached record highs, bolstered by robust earnings from companies like Microsoft and Meta Platforms. Notably, 81% of the 317 S&P 500 firms that reported earnings exceeded analysts' expectations, surpassing the four-quarter average beat rate of 76%.
Large-cap equity funds saw a net inflow of $7.81 billion, reversing a three-week trend of net selling. In contrast, small-cap and mid-cap funds faced net outflows of $3.9 billion and $35 million, respectively. Sectoral equity funds also posted inflows of $962 million, with the financial and technology sectors receiving $650 million and $583 million, respectively.
U.S. bond funds continued to attract investment, with $6.08 billion in inflows for the 15th consecutive week. Short-to-intermediate investment-grade funds received $1.99 billion, marking the largest weekly purchase since July 2. Government, treasury, and municipal debt funds saw combined inflows of nearly $2 billion. Conversely, money market funds experienced $1.89 billion in outflows.
The positive sentiment in the equity market was further supported by strong corporate earnings. Microsoft and Meta Platforms reported impressive results, contributing to the record highs in the S&P 500 and Nasdaq indices. The earnings season has been robust, with a significant majority of companies exceeding analysts' expectations.
Investors are closely monitoring the developments in the U.S.-EU trade negotiations, as a potential deal could further bolster market confidence. The sustained inflows into equity and bond funds reflect a cautiously optimistic outlook among investors, despite ongoing global economic uncertainties.