U.S. equity funds posted net outflows of $11.12 billion in the week through September 2, marking a second consecutive week of withdrawals, according to LSEG Lipper data. The outflow was smaller than the $22.72 billion recorded the previous week. Higher bond yields and oil prices weighed on investor sentiment after the U.S. struck Iranian military targets near the Strait of Hormuz and Tehran said it had targeted U.S. assets across the region. Strong results from Nvidia and Dell Technologies helped support the view that AI-related spending and the associated market trade remain intact. Large-cap equity funds saw $7.52 billion in net outflows, compared with $24.73 billion in net sales the previous week, while mid-cap and small-cap funds recorded outflows of $572 million and $1.83 billion. Sector funds reported $3.48 billion in net selling, led by technology, financials and industrials. Bond fund inflows fell to a five-week low of $4.27 billion, although short-to-intermediate government and Treasury funds attracted $4.53 billion. Money market funds drew nearly $48.76 billion, their highest weekly intake in four weeks.