Foreign investors are buying U.S. equities at record levels, even as Washington’s trade policies and global political tensions dampen sentiment toward other American products.
According to Federal Reserve data reported by Bloomberg, overseas buyers poured $290.7 billion into the U.S. stock market in the three months ending June 30, marking the highest quarterly inflows on record. Foreign holdings of U.S. equities now total around $18 trillion — about 30% of the nearly $60 trillion U.S. market — the largest share in data going back to 1945.
The surge comes despite former President Donald Trump’s aggressive trade stance earlier this year, which included threats of tariffs and even musings about annexing Canada. While such rhetoric spurred concerns that foreign investors might shun U.S. financial products, the opposite has happened.
Instead, U.S. stocks have proven too attractive to ignore, driven by the explosive growth of artificial intelligence firms such as Nvidia, Microsoft, and Alphabet. Foreign allocations to equities now make up nearly 32% of all U.S. assets held abroad, breaking a record that had stood since 1968, Bloomberg noted.
“While tariffs have led many foreign consumers to boycott U.S. products, U.S. equities remained in high demand,” said Rob Anderson, U.S. sector strategist at Ned Davis Research. Canadians, for instance, have increased stock purchases while reducing consumption of American goods.
Bank of America strategist Elyas Galou said Treasury International Capital data suggests foreign holdings of U.S. equities are on pace to rise by $2.8 trillion this year. “International investors are still buying U.S. equities at a very strong pace,” he added.
Notably, the buying comes even as the S&P 500 has lagged behind other major global benchmarks in 2025. The MSCI World Index has gained 15% so far this year, while an equivalent index excluding U.S. stocks has risen 22% — compared with a 13% gain for the S&P 500.
For some analysts, the trend is puzzling. “Why would they come here if their own markets are hitting record highs?” asked Sam Stovall, chief investment strategist at CFRA. He pointed to selective bets on AI and the dominant role of U.S. tech companies, which have set 26 new all-time highs this year.
Others argue the flows reflect pragmatism. “A lot of foreign holders of U.S. assets who don’t want to hold Treasuries realize that their complaints are against the government and not against companies,” said Brian Jacobsen, chief economist at Annex Wealth Management.
Fund flow data suggests the momentum has carried into the third quarter, with foreign investors adding to U.S. equity funds at the fastest pace since March, according to EPFR.
