The headlines keep flashing red. But when you follow the money, you get a different picture. Despite a world tangled in geopolitical tension and recession warnings, foreign investors are still gripping American stocks like they know something the headlines don’t.
The numbers say it all. As of June 2024, Treasury data shows foreign holdings of U.S. securities touched $31.3 trillion. That includes $16.99 trillion in equities, up from $13.7 trillion the year before. That’s not hedging. That’s anchoring. War in the Middle East, China trade snarls, and a Fed boxed in by inflation haven’t moved the needle.
This isn’t flight capital. This is parked capital. Long-term foreign debt holdings now total $12.98 trillion, with short-term debt at $1.3 trillion. That’s $4.4 trillion in new exposure over twelve months. Nobody throws around four trillion to see what sticks. This is conviction in the bones of the American market.
Zoom into May 2025 and things get louder. Goldman Sachs flagged $37 billion in foreign money heading for the exits. That came after $7 billion the month before. Two months. Two jolts. But step back and it fades. Year-to-date, the net foreign outflow is just $31 billion. Compare that to $201 billion in fresh capital that poured in during November and December. Context rewrites the story.
Retail traders are hardly passive in this setup. According to JPMorgan, May alone saw $23 billion in retail stock buys. Add that to $40 billion in March and April. Public buying is holding its line. Total retail flow for 2025 now tops $150 billion. They’re not just spectators. They’re participants.
So what gives? Why hold near record highs while headlines scream disaster?
The answer is structural. America’s markets offer liquidity, depth, and a dollar still propping up the world’s debt scaffolding. No BRICS fantasy. No currency coalition has cracked that. When risk rises, global capital doesn’t scatter. It consolidates. It consolidates in the U.S. because there’s still no rival with the infrastructure to hold it all.
Even with the May pullback, global investors haven’t unwound their faith. They’ve rebalanced. Trimmed. Taken profits. But they haven’t left. And it shows.
Sources
https://home.treasury.gov/news/press-releases/sb0037
https://www.morningstar.com/markets/june-2025-us-stock-market-outlook-has-storm-passed