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Global equity funds recorded their first outflow in eight weeks as investor sentiment deteriorated amid escalating tensions in the Middle East. Data from Investing.com shows $2.3 billion left equity markets in the latest week, reversing a trend of consecutive inflows since late October. The outflow was driven by fears of prolonged regional instability, energy price volatility, and potential disruptions to global supply chains. Sectors like energy and defense saw heightened trading activity as investors hedged against geopolitical risks. This development signals growing caution among institutional and retail investors, who are recalibrating portfolios amid heightened uncertainty. The Middle East conflict has reignited concerns about oil market volatility, with Brent crude futures rising 3.2% on the week. Traders are now closely monitoring diplomatic efforts and military movements in the region, as any escalation could trigger further market turbulence. The S&P 500 and NASDAQ indices both showed mixed performance, with defensive sectors like utilities and healthcare gaining traction. The outflow underscores the vulnerability of global markets to geopolitical shocks. Central banks may face renewed pressure to balance inflation control with economic stability if tensions persist. For traders, the coming weeks will be critical in determining whether this outflow becomes a sustained trend. Energy prices, regional conflict developments, and U.S. Federal Reserve policy statements will be key watchpoints.
