Foreign investors are sticking with US stocks amid Trump tariff turmoil

In April, I picked up the talk about the “Steam Selling” trade in Wall Street after unveiling the “Tahrir Day” tariff for president Trump. American stocks, the cabinet, and all the dollar decreased simultaneously-unusual dislocation that shook confidence in America’s safe position.

But modern data indicates that abroad investors have already stuck with American stocks in 2025.

From the beginning of the year to the end of June, foreign investors have allocated more than 30 % of their US financial assets to stocks-near standard levels and more than average in the long run about 19 %, according to NED DAVIS Research. This means globally, investors are not alternating from stocks as a share of the pie, despite this year’s tariff disorders.

The simplest reason for the absence of a significant allocation is that, since the market recovery from its lowest levels in April, the tariff news did not exceed the stocks much. Initial panic faded as companies managed to better manage the influence, which is afraid of investors. According to CITI, the effective tariff rate in the United States has become closer to 9 %, or nearly half of the theory rate by 18 %, confirming how transportation, transitions, storage and insomnic margins helped dig the effect of high fees.

At the same time, the low interest rates and the renewal of optimism about growth in the United States has settled on the investor’s confidence. However, the latest wave of Trump’s tariffs expect expectations, raising questions about whether the impact of the trade war will remain minimal.

Read more: Latest news and updates on Trump’s tariff

“From my point of view, the US expectations were very high this year, and international markets’ expectations were very low,” said Keith Lerner, chief investment official in Truest. “This means only that a little good news [goes] Long road for these other markets. Some bad news can come a long way in the United States market. “

This bad news also included President Trump’s escalating speech against Federal Reserve Chairman Jerome Powell, who raised fears of the federal reserve independence at a time when investors were already asking about the flexibility of the US economy.

Instead of switching to the treasury or dollar, traditional havens in times of tension, investors threw them along with stocks. International stocks increased, at one point, by US stocks, up to 17 %, according to Linthrub Capital. This gap has been narrowed since then to 10 %.

“What I saw in the spring was a step that went to a large extent,” said Adam Kunz, chief investment employee in Winthroub. “International stocks are still rising, but a delta between them and the United States has collapsed. The bet that the gap will be closed.”

Meanwhile, the price ratios to profits make American companies shares more convincing.

“Everything is due to technology,” said Lenner Trueer. “When you look at these advanced international markets, they do not have a lot of technology. That is why investors cool down a little there.”

Politics also played a role. Lenner said that motivation in Europe helped push international markets earlier this year, but the United States now has an advantage as the federal reserve has lower interest rates and recession anxiety, and Lenerner adds new clarity on financial motivation in Washington to a “more supportive background.”

Meanwhile, the dollar settled after the sharp spring slice. Although it is still weaker than it is at the beginning of the year, the stability of Greenback has dismantled one of the largest back winds of international stocks, because currency gains were most of its early gatherings in early 2025.

At the present time, Lerner said that Truist is still “team Usa”, even if the company added some international exposure as a hedge. “We do not want to give up the basic direction as we believe that the main issue is still strong – the United States is still,” he said.

Ally channel He is a major correspondent in Yahoo financing. Follow it on x Allie_ANALand LinkedIn, And send it by email to Alexandra.ANAL@yahoofinance.com.

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