Global investors returning to US

You can’t escape US equities, analyst says

- NAOMI ROVNICK

Street signs outside the New York Stock Exchange. Wall Street's market supremacy is back, and investors are likely to favour US assets in the coming quarter.REUTERS

(REUTERS)

An investor stampede from the United States to Europe and Asia has reversed course as big money managers ride a wave of Al and interest rate-cut euphoria into the year-end, ditching the “rest-of-the world” trade for now.

Global fund managers had offloaded US stocks at a record pace after President Donald Trump unveiled steep reciprocal tariffs on April 2. The market has recovered since then, however, and US stocks have surged 7% in the last quarter.

Wall Street's market supremacy is back, and investors are likely to favour US assets in the coming quarter as traders price in 110 basis points of Federal Reserve rate cuts by end-2026 and AI juggernauts boost analysts’ stock market targets and US economic growth.

“There’s no need for pessimism right now about the US,” said Salman Ahmed, Fidelity International’s global head of macroeconomics and strategic asset allocation. He was positive on US small-cap stocks that typically benefit from rate cuts and had turned neutral on Europe and Japan.

The Fed last week cut rates for the first time since December.

BETTING ON US EQUITIES