Barclays says a trio of forces led by artificial intelligence is primed to push global equities higher, as US stock funds notch their first inflows in weeks.
The banking giant’s call comes as investors reversed course and added billions to equity funds despite recent volatility in mega-cap technology names, reports Reuters.
According to LSEG Lipper, global equity funds recorded net inflows of $28.36 billion in the week to September 24, snapping a three-week streak of outflows. Standing out are US equity funds, receiving $12.06 billion in new money, their first positive week following three weeks of outflows.
European funds followed with $10.73 billion in inflows, while Asian funds gained $4.12 billion.
Barclays global chair of research Ajay Rajadhyaksha says he sees three tailwinds boosting equities.
“We believe the AI revolution, Fed cuts and fading tariff uncertainty will all support growth. Global equities look set to outperform core fixed income for another quarter.”
The remarks came as investors digested news that Nvidia planned to invest up to $100 billion in OpenAI, reinforcing optimism that AI capital expenditures are entering a new stage of scale.
Meanwhile, CME Group’s FedWatch tool shows an 87.7% chance of a 25-basis-point cut at the next FOMC meeting slated for October.
Earlier this month, Fundstrat’s Tom Lee predicted that Fed rate cuts would be bullish for the AI trade.
“So I’m looking at September 1998 and September 2024 as the playbook, because those are both years where the Fed was on extended pause and they cut in September. The number one trade is the Nasdaq 100. So I think that’s why the Mag 7 and the AI trade get a lot of liftoff.”
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