US Money Market Funds See Significant Inflows for the Week Ending October 2, Report by Reuters

U.S. money market funds experienced substantial inflows during the week ending October 2, as investors sought safer assets amid rising geopolitical tensions in the Middle East and anticipation of an important payroll report. According to data from LSEG Lipper, investors added a net $41.32 billion to U.S. money market funds, following net purchases of approximately $113.11 billion the previous week.

A stronger-than-expected non-farm payrolls report for September, released on Friday, alleviated concerns regarding the state of the U.S. labor market and reduced market speculation about a significant Federal Reserve rate cut in November.

In addition, U.S. equity funds also attracted impressive inflows, receiving $30.8 billion during the week—the largest amount since at least December 2020. Large-cap equity funds alone saw a substantial influx of $35.49 billion, marking the highest inflow since January 2019. However, U.S. investors withdrew a net $1.94 billion from mid-cap funds, $1.72 billion from multi-cap funds, and $1.31 billion from small-cap funds.

Sector-specific trends indicated that real estate, utilities, and industrial sectors gained inflows of $461 million, $356 million, and $321 million, respectively, while healthcare and financial sectors faced net outflows of $919 million and $537 million.

Meanwhile, the demand for U.S. bond funds declined to its lowest level in four weeks, with net purchases totaling approximately $2.8 billion. U.S. short-to-intermediate government and treasury funds experienced net sales of $5.03 billion, following three weeks of inflows. Conversely, short-to-intermediate investment-grade funds, municipal debt, and general domestic taxable fixed income funds saw net purchases of $3.6 billion, $1.88 billion, and $852 million, respectively.