US equity funds draw largest weekly inflow in three weeks

(Reuters) -U.S. equity funds attracted the largest net investment in three weeks in the week through September 3 driven by expectations for a potential Federal Reserve rate cut this month.

A favorable antitrust ruling for technology conglomerate Alphabet also boosted appetite for the tech sector.

Investors bought a net $2.42 billion worth of U.S. equity funds during the week, which was their largest weekly net purchase since August 13, LSEG Lipper data showed.

A cooling U.S. labor market and recent dovish comments by Fed officials, bolstered bets that the U.S. central bank would reduce borrowing costs at its policy meeting this month.

Market participants anticipate a 99.7% likelihood of a quarter-point Fed rate reduction this month, CME's Fed Watch tool showed.

Investors pumped a net of $1.22 billion into the technology sector funds, the largest amount in three weeks. The financial sector also saw a notable $1.05 billion worth of weekly net inflows.

Meanwhile, U.S. bond funds saw $5.44 billion in weekly net investments as investors extended their buying into a 20th straight week.

Short-to-intermediate investment-grade funds and general domestic taxable fixed income funds lead net purchases, with $2.64 billion and $2.08 billion, respectively in net purchases.

Investors also snapped up a robust $53.52 billion worth of money market funds, registering the largest weekly net purchase since August 6.

(Reporting by Gaurav Dogra in Bengaluru;Editing by Nick Zieminski)

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