US equity outflows hit $24.78 billion as rate cut hopes fade

Investors pulled a net $24.78 billion from US equity funds in the week to March 18. High inflation and a cautious Fed dampened rate cut expectations for 2026.

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Investors in the United States pulled back from equity funds at the fastest pace in nearly two and a half months during the week ending March 18. This significant shift in sentiment was driven by rising oil prices, higher-than-anticipated inflation data, and a cautious stance from the Federal Reserve, all of which have dampened market expectations for interest rate cuts later this year.

Data from LSEG Lipper indicates that investors divested a net $24.78 billion from equity funds, the largest weekly outflow since early January. The retreat was most pronounced in large-cap funds, which saw $36.11 billion in net sales—the highest level of weekly outflows since mid-September 2025. Mid-cap funds also faced pressure with a net $606 million outflow, although small-cap funds managed to attract roughly $1.75 billion in net purchases.

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