U.S. stock funds attracted 19.7 billion in a single week to create a new high in over two months, with investors betting on economic resilience and expectations of interest rate cuts.

As of the week ending February 26th, investor confidence in the resilience of the US economy and expectations of a potential interest rate cut by the Federal Reserve before the end of the year to stimulate economic growth have strengthened, leading to an increase in holdings of US stock funds. According to data from LSEG Lipper, investors net bought $19.71 billion worth of US stock funds, marking the largest weekly net purchase since December 25, 2024, despite concerns over tariffs. UBS Group AG's Chief Investment Officer of Global Wealth Management, Mark Haefele, stated, "The US economy remains in good shape, and we believe that announced tariffs may not necessarily have a significant negative impact on growth. However, we expect market volatility to continue, as recent trends in the bond market once again demonstrate the importance of high-quality fixed income in resilient investment portfolios to help investors navigate future uncertainties." Among various types of stock funds, net purchases of US large-cap stock funds reached $20 billion, the highest in two months, with diversified stock funds net buying $137 million. However, small-cap stock funds and mid-cap stock funds saw net outflows of $545 million and $197 million, respectively. In terms of sector funds, technology, healthcare, and communication services attracted $10.5 billion, $8.69 billion, and $5.18 billion, respectively, while financial sector funds experienced significant outflows of $12 billion. Meanwhile, the S&P 500 index and the Nasdaq Composite index both fell sharply by 2.5% and 5% respectively this week, mainly impacted by the decline in NVIDIA Corporation's stock prices (NVDA.US), as the company's quarterly performance did not meet investors' expectations. Additionally, investors poured $49.47 billion into money market funds, marking the largest single-week net purchase since January 8th. US bond funds continued to see strong demand for the eighth consecutive week, with a total net inflow of $7.42 billion for the week. In segmented markets, US short- to medium-term investment-grade funds, short- to medium-term government and treasury funds, and general domestic taxable fixed-income funds led the way, with net inflows of $1.82 billion, $1.56 billion, and $1.37 billion, respectively.