The expectation of a rate cut by the Federal Reserve is boosting momentum, with global stock funds attracting $10.65 billion in a single week, reaching a three-week high.

Global equity funds saw the largest weekly inflows in three weeks in the week ending September 3, as market expectations for a rate cut by the Federal Reserve later this month continued to rise, and a favorable antitrust ruling for Alphabet Inc. Class C (GOOGL.US) boosted market sentiment. According to data from LSEG Lipper, investors poured a net $10.65 billion into global equity funds in the week ending September 3, marking the largest weekly inflow since August 13. Signs of cooling in the US job market and dovish comments from some Federal Reserve officials strengthened investor bets on policy easing. CME Group Inc. Class A's "FedWatch Tool" showed that market expectations for a 25 basis point rate cut by the Federal Reserve this month had reached a high probability of 99.7%. By region, European equity funds attracted a net inflow of $3.85 billion, up from $1.32 billion a week ago; Asian equity funds attracted a net inflow of $3.3 billion; and US equity funds attracted a net inflow of $2.42 billion. By sector, technology equity funds attracted a net inflow of $1.87 billion, marking the largest weekly net inflow since August 13; financial, gold, and precious metals equity funds also caught the interest of investors, attracting net inflows of $1.16 billion, $1.07 billion, and $2.42 billion respectively. Fixed income remained in favor, with global bond funds seeing inflows for the 20th consecutive week, totaling $18.74 billion. Euro-denominated bond funds attracted $2.61 billion, the highest level since August 13; corporate bond funds attracted $2.13 billion in inflows; and short-term bond funds attracted $1.82 billion in inflows. Furthermore, inflows into money market funds rose to a four-week high of $57.59 billion. Commodity funds tied to gold and precious metals attracted $5.2 billion in inflows, the highest weekly level since at least November 2021. In emerging markets, equity funds saw the highest weekly net inflow of $1.05 billion since July 30. According to data from 29,699 funds, investors also net bought $2 billion in emerging market bond funds.