What is the 'pythonic' equivalent to the 'fold' function from functional programming?

The Pythonic way of summing an array is using sum. For other purposes, you can sometimes use some combination of reduce (from the functools module) and the operator module, e.g.:

def product(xs):
    return reduce(operator.mul, xs, 1)

Be aware that reduce is actually a foldl, in Haskell terms. There is no special syntax to perform folds, there's no builtin foldr, and actually using reduce with non-associative operators is considered bad style.

Using higher-order functions is quite pythonic; it makes good use of Python's principle that everything is an object, including functions and classes. You are right that lambdas are frowned upon by some Pythonistas, but mostly because they tend not to be very readable when they get complex.

Haskell

foldl (+) 0 [1,2,3,4,5]

Python

reduce(lambda a,b: a+b, [1,2,3,4,5], 0)

Obviously, that is a trivial example to illustrate a point. In Python you would just do sum([1,2,3,4,5]) and even Haskell purists would generally prefer sum [1,2,3,4,5].

For non-trivial scenarios when there is no obvious convenience function, the idiomatic pythonic approach is to explicitly write out the for loop and use mutable variable assignment instead of using reduce or a fold.

That is not at all the functional style, but that is the "pythonic" way. Python is not designed for functional purists. See how Python favors exceptions for flow control to see how non-functional idiomatic python is.

In Python 3, the reduce has been removed: Release notes. Nevertheless you can use the functools module

import operator, functools
def product(xs):
    return functools.reduce(operator.mul, xs, 1)

On the other hand, the documentation expresses preference towards for-loop instead of reduce, hence:

def product(xs):
    result = 1
    for i in xs:
        result *= i
    return result