U.S. Bond Funds See Positive Turnaround Amid Trade War Tensions

U.S. bond funds experienced their first net inflows in six weeks, totaling $206 million, as optimism grew over easing trade tensions with China. The Trump administration is contemplating reducing tariffs, while significant investments persisted in U.S. mortgage funds, and money market funds experienced a resurgence.

In a notable market shift, U.S. bond funds recorded net inflows for the week ending April 23, breaking a five-week streak of declines, as concerns over a trade war with China showed signs of easing. According to LSEG Lipper data, investors added $206 million to U.S. bond funds.

The potential for de-escalation was further highlighted by the Trump administration's consideration to lower tariffs on Chinese imports, pending negotiations with Beijing. This move follows China's announcement of possible exemptions for certain American goods from hefty tariffs.

While U.S. mortgage funds attracted an impressive $4.84 billion, other sectors like financial, tech, and consumer staples witnessed outflows. Nevertheless, U.S. money market funds saw a robust rebound, with investors buying $24.43 billion worth following prior selloffs.

(With inputs from agencies.)