While Donald Trump runs the White House again, reigniting his trade war, dropping polarizing ideas like annexing Canada, and poking at just about every ally abroad, non-American investors are doing the one thing nobody expected — they’re throwing record-breaking amounts of money into U.S. equity markets. Foreigners are buying U.S. stocks like it’s the last bus out of town. According to the Federal Reserve, foreign ownership of U.S. stocks just hit nearly 32% of all U.S. assets held by non-residents, blowing past a record that had held since 1968. This spike came in the second quarter of 2025, right in the middle of Trump’s loudest economic rants and protectionist policies. While global demand for U.S. goods has dropped and fewer people are flying into the States, the stock market is the one place foreigners aren’t backing away from. They’ve actually sped up. Tech is part of the reason, everyone’s trying to grab a piece of the AI boom that’s fattened share prices of giants like Nvidia, Alphabet, and Microsoft. But while money has been pouring into stocks, the dollar’s been sinking, which could be a sign that some investors are hedging their bets. Foreign buyers flood U.S. stocks while skipping the products Rob Anderson, who tracks sectors at Ned Davis Research, said the trade war may have scared off foreign buyers of U.S. products, but it did nothing to cool their appetite for stocks. “While tariffs have led many foreign consumers to boycott US products, US equities remained in high demand,” Rob said. Canadians in particular are still putting cash into U.S. stocks even though they’re avoiding American-made goods. In just three months ending June 30, foreigners pushed $290.7 billion into the U.S. stock market. And that was just the beginning. Elyas Galou, global investment director at Bank of America, said that by July, foreign holdings of U.S. equities were already on pace to jump by $2.8 trillion this year. That kind of growth is unheard of. By the time the data came in, total foreign ownership had ballooned to $18 trillion, which is 30% of the entire $60 trillion U.S. equity market, the highest level since records began in 1945. Elyas said, “International investors are still buying US equities at a very strong pace.” These holdings have climbed not just in dollar value, but in total market share — showing this isn’t just a side bet. This is serious buying. And yet, 2025 hasn’t exactly been a great year for U.S. indexes. On a pure return basis, the S&P 500 has underperformed major indices in Mexico, Brazil, Canada, China, and Japan, both in local currencies and in dollar terms. The MSCI World Index is up 15% this year and might outdo the S&P for the first time since 2017. If you strip the U.S. out completely, the MSCI All-Country World Index has done even better — 22% up, compared to 13% on the S&P 500. Tech obsession and Fed rate cut push investment frenzy Sam Stovall, chief strategist at CFRA, said he was surprised. “Why would they come here if their own markets are hitting record highs?” he asked. The answer, he figures, is the AI wave. Foreigners aren’t buying broadly — they’re targeting big U.S. tech names. “The tech sector has scored 26 new all time highs this year,” Sam said. That bet started paying off fast. Since bottoming on April 8, U.S. stocks have roared back. What pushed them higher? The Federal Reserve made its first rate cut in over a year, which sent prices climbing again. Elyas pointed to EPFR fund flow data, saying international investors kept pumping money into U.S. equity funds at the fastest pace since March — and they didn’t stop through the third quarter. Brian Jacobsen, economist at Annex Wealth Management, thinks a lot of this has nothing to do with politics. He said many foreigners just don’t want to hold Treasuries anymore, but they still want U.S. exposure. “A lot of foreign holders of US assets who don’t want to hold Treasuries realize that their complaints are against the government and not against companies,” Brian said. Want your project in front of crypto’s top minds? Feature it in our next industry report, where data meets impact.
