May 3 (Reuters) - U.S. investors were net sellers of

equity funds for a fifth successive week in the seven days to

May 1, exercising caution ahead of the Federal Reserve's policy

decision and scaling back expectations for interest rate cuts

that were prevalent at the start of the year.

According to LSEG data, investors shed a net $5.48 billion

worth of U.S. equity funds, extending the weekly selling trend

into a fifth consecutive week.

Fed Chair Jerome Powell kept rates steady on Wednesday,

signaling future rate cuts but cautioning they might be delayed

due to persistent inflation in the first quarter.

However, U.S. large-cap equity funds were in demand,

recording approximately $1.2 billion in net purchases during the

week - marking the second consecutive weekly inflow, buoyed by

strong earnings from Alphabet and Microsoft ( MSFT ).

Meanwhile, U.S. small-cap, mid-cap, and multi-cap funds

experienced net outflows of $2.14 billion, $1.08 billion, and

$637 million, respectively.

By sector, investors withdrew $790 million, $684 million,

and $295 million from the healthcare, consumer discretionary,

and industrial sectors, respectively.

U.S. bond funds attracted approximately $674 million in net

purchases, marking the second consecutive week of inflows.

U.S. mortgage funds received a substantial $1.35 billion,

marking the largest weekly inflow since January 2023. Loan

participation and municipal debt funds also recorded net

purchases of $665 million and $515 million, respectively, during

the week.

Meanwhile, investors withdrew approximately $2.66 billion

from U.S. short/intermediate government and treasury funds,

ending a four-week buying streak.

Money market funds secured $26.53 billion in a second

successive week of net buying.