U.S. Equity Funds Surge with $12 Billion Weekly Inflows: What’s Driving the Momentum?

U.S. equity funds have recorded a significant turnaround, posting net weekly inflows of $12.06 billion after two weeks of heavy outflows.

This sharp reversal was driven primarily by renewed investor confidence sparked by Nvidia’s bold $100 billion investment plan in OpenAI.

Over the past fortnight, investors had withdrawn nearly $40 billion from U.S. stock markets. Large-cap funds played a crucial role in this week’s bounce back, injecting $16.94 billion into equities—the strongest weekly inflow since April.

Meanwhile, mid-cap funds saw withdrawals totaling $1.64 billion, and small-cap funds experienced a minor exit of $71 million.

Nvidia Sparks Investor Confidence and Market Activity

The renewed appetite for equities aligns with recent developments in the tech sector, especially Nvidia’s announcement to channel $100 billion into building data centers with its next-generation chips.

This massive investment is expected to power 4 to 5 million GPUs with a 10-gigawatt capacity, beginning in Q2 2026.

CEO Jensen Huang described the initiative as monumental, underscoring Nvidia's role as OpenAI’s preferred chip and networking systems supplier.

Notably, Nvidia's stock price surged to $183.85 immediately following the announcement, adding over $200 billion in market value within an hour before settling at $177.17, with a market capitalization of $4.3 trillion.

OpenAI’s CEO Sam Altman highlighted the AI company’s urgent infrastructure needs amid a soaring user base of 700 million weekly users.

The company is focused on expanding data capacity and pushing research initiatives, supported by major investors including Microsoft, SoftBank, and Thrive Capital. OpenAI is valued at $500 billion.

Sectoral equity funds attracted $407 million in net new investments, with the industrial sector receiving a strong boost of $1.11 billion this week. U.S. bond funds also gained robust inflows amounting to $11.9 billion, marking the best week since February 2021.

Among bond funds, short-to-immediate-term government and treasury bonds secured $8.02 billion, alongside $1.78 billion in general domestic taxable fixed income and $1.69 billion in short-to-intermediate investment-grade funds.

Global Equity and Bond Markets See Revived Interest

Globally, equity funds reversed prior outflows with an inflow of $28.96 billion this week. European and Asian markets saw net inflows of $10.73 billion and $4.12 billion, respectively.

Sectoral equity funds collectively attracted $4.56 billion, driven by the industrial sector ($1.65 billion), financial industry ($1.45 billion), and technology sector ($1.01 billion).

Emerging markets continued their positive streak with a sixth consecutive weekly inflow of $2.65 billion.

The global bond market experienced its largest inflow since 2022, totalling $22.96 billion.

Short-term funds accounted for $10.1 billion, while Euro-denominated and corporate bonds gained $2.3 billion and $1.95 billion, respectively.

Despite these inflows, market indices showed mixed performance in the U.S. The S&P 500 declined by 0.3% over the past five days, trading near $6,639 with a year-to-date gain of 12.88%.

Conversely, the Dow Jones index rose 0.72% week-on-week with an 8.78% YTD, indicating growing investor confidence. The UK’s FTSE also increased 0.74%, reaching a 12.41% YTD gain.

U.S. money market funds attracted $26.71 billion, marking steady inflows over several weeks.

However, global money market funds experienced a $12.96 billion outflow for the second consecutive week, as reported by Reuters.

The surge in equity fund inflows reflects a combination of strong investor interest in technology-driven growth and efforts to address infrastructure challenges that underpin the AI revolution.