**Massive Inflows into U.S. Money Market Funds Amid Investor Caution**

U.S. money market funds saw significant inflows during the week ending June 4, driven by investor concerns over rising U.S. tariffs on steel imports, ongoing trade disputes between President Donald Trump and China, and anticipation around a critical employment report. According to LSEG Lipper data, investors funneled a substantial $66.24 billion into money market funds, marking the largest weekly net purchase since December 4, 2024.

In stark contrast, more volatile equity funds experienced notable outflows, with $7.42 billion pulled out over the week, an increase from the $5.39 billion of net disposals the previous week. Small-cap funds faced the most significant drawdowns, with net outflows of $2.99 billion, the highest seen since April 30. Additionally, multi-cap, mid-cap, and large-cap funds reported outflows of $2.13 billion, $1.05 billion, and $962 million, respectively.

Sector-specific funds had mixed performances, with a modest inflow of $136 million. Investors showed a particular interest in tech, contributing a net $1.15 billion, and consumer staples, adding $309 million. Conversely, financial sector funds saw withdrawals amounting to nearly $1.16 billion.

The demand for U.S. bond funds also tapered, with net inflows hitting a four-week low of $4.8 billion. Despite this general cooling, short-to-intermediate investment-grade bond funds became increasingly popular, attracting $3.98 billion—the highest weekly inflow since November 2024. Inflation-protected funds and general domestic taxable fixed-income funds also saw significant investments, with net inflows of $634 million and $505 million, respectively.

This shift reflects a broader trend of investors seeking safer investment options amid an unpredictable economic landscape.