After a burst of “Sell America” chatter in April, sparked by President Trump’s “Liberation Day” tariffs, U.S. stocks, Treasurys, and the dollar tumbled together in an unusual safe-haven shakeup. Yet new data suggest overseas investors have not abandoned American equities.
From January through June, foreign investors allocated more than 30% of their U.S. financial assets to stocks—near record highs and far above the long-term average of roughly 19%, according to Ned Davis Research. Globally, investors have not rotated out of U.S. equities despite the year’s trade turbulence.
Part of the resilience stems from the market’s rebound off its April lows. Tariff headlines have proved less damaging than initially feared, as companies navigated higher duties through carve-outs, transshipments, stockpiling, and slimmer margins. Citi estimates the U.S. effective tariff rate is now about 9%, roughly half the 18% theoretical rate.
Lower interest rates and improving growth expectations have also bolstered investor confidence, though Trump’s latest round of tariffs adds uncertainty about whether the trade war’s impact will stay contained. “Expectations for the U.S. were extremely high coming into this year, and expectations for international markets were extremely low,” said Keith Lerner, chief investment officer at Truist. “That means a little good news goes a long way for other markets, and a little bad news can go a long way for the U.S.”
The spring sell-off underscored those dynamics. As Trump unveiled steeper-than-expected tariffs, investors dumped Treasurys and the dollar alongside stocks, while international equities surged—at one point outperforming U.S. shares by as much as 17%, according to Winthrop Capital. That gap has since narrowed to about 10%.
“What you saw in the spring was a move that just went too far,” said Adam Coons, Winthrop’s chief investment officer. “International stocks are still up, but the delta between them and the U.S. has collapsed. The bet that the gap would close is working out.”
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