Global Equity Funds Record $23.21 Billion Outflow in Week Through September 16, Largest Withdrawal in Nine Months Driven by Oil Price Surge and Fed Hawkishness

Global equity funds recorded their largest weekly outflow in nine months during the week through September 16, with investors withdrawing a net $23.21 billion, the biggest weekly outflow since December 17, 2025, according to LSEG Lipper data reported by Reuters on September 18. US equity funds bore the brunt of the selling, with net outflows of $31.44 billion marking the fourth consecutive week of withdrawals, while European equity funds saw net outflows of $295 million. Asian funds bucked the trend, attracting net inflows of $6.26 billion. The outflows came as crude oil prices climbed to four-month highs during the week, stoking inflation worries and pushing Treasury yields higher, which weighed on growth-oriented funds. The Federal Reserve raised interest rates by 25 basis points on Wednesday and indicated that further increases may be needed to curb inflation fueled by higher energy costs linked to the Iran conflict. Weekly inflows into equity sector funds climbed to a six-week high of $4.49 billion, led by technology at $1.94 billion, financials at $1.31 billion, and consumer discretionary at $621 million, suggesting some investors were rotating within equities rather than exiting entirely. The magnitude of the outflow matters because it represents a sharp reversal in investor sentiment at a moment when equity markets remain near record highs. The S&P 500 closed September 16 around 7,606, and the large institutional de-risking suggests caution ahead of potential further Fed tightening. Money market funds recorded outflows of $77.42 billion during the same week, ending a two-week streak of net purchases, indicating investors are not simply moving to cash but are reassessing allocations broadly. Gold and precious metals funds attracted $1.17 billion, marking their ninth weekly inflow in the past 10 weeks, pointing to renewed interest in inflation hedges.