Back in April, Wall Street started buzzing about a potential “Sell America” trade after President Trump announced his so-called “Liberation Day” tariffs. That shock sent US stocks, Treasury bonds, and the dollar tumbling all at once — a rare event that made many question America’s traditional role as a safe haven.
But despite those fears, new data shows that overseas investors have held on to US equities in 2025. From January through June, foreign investors kept more than 30% of their US assets in stocks — close to record highs and far above the long-term average of about 19%, according to Ned Davis Research. In other words, even with tariff drama, global investors aren’t rushing out of US equities.
One reason is that after markets rebounded from their April lows, tariff headlines lost much of their sting. Companies handled the impact better than expected. Citi estimates that the effective US tariff rate is around 9% — about half of the 18% theoretical rate — thanks to exemptions, transshipments, stockpiling, and slimmer profit margins absorbing the blow.
At the same time, falling interest rates and renewed optimism about US growth have helped stabilize investor sentiment. Still, Trump’s fresh wave of tariffs adds uncertainty, leaving investors wondering whether the trade war will cause more lasting damage.
Some strategists note that expectations for the US were sky-high going into 2025, while expectations abroad were very low. That meant any negative surprise could hit US markets harder, while even small positives boosted international stocks. Indeed, after Trump’s tariff announcement, US investors didn’t rush into Treasurys or the dollar as usual — they sold those too, and international equities briefly outperformed US stocks by as much as 17%. That lead has since narrowed to around 10%, according to Winthrop Capital.
Even so, valuations and strong tech exposure continue to make US stocks attractive. Analysts point out that many international markets simply don’t have the same level of tech-driven growth. Add in Fed rate cuts, easing recession fears, and new clarity on fiscal stimulus, and the US looks like the stronger bet again.
The dollar has also stabilized after its sharp spring decline. While still weaker than at the start of the year, it’s no longer boosting overseas markets the way it did earlier in 2025.
For now, most strategists remain overweight on US markets, while keeping some international exposure as a hedge. As Truist’s Keith Lerner put it: “The fundamental case is still strongest in the US.”