Foreign capital flows into US stocks hit record as debt appetite wanes

Foreign capital flows into US stocks reach historic high

Foreign capital flows into US stocks surged to a fresh peak, with overseas investors buying ↑ $940bn of equity in the twelve‑month period ending July. The influx coincided with the S&P 500 climbing ↑ 10% over the same span, signaling a shift from debt‑heavy assets to equities.

Drivers behind the surge

Higher yields on Treasury bonds and a flattening yield curve have reduced the appeal of fixed‑income, prompting institutional and retail investors abroad to seek growth in U.S. equities.

“The data reflects a clear reallocation away from bonds,” said a senior analyst at Reuters.

Analysts at Bloomberg note that the trend may persist if fiscal uncertainty abroad continues, potentially boosting market depth and volatility.