This article describes what foreign investors are doing since the USD has lost 8% over the past year and may weaken still more if interest rates drop.
Forget the ‘Sell America’ Trade. Here Comes ‘Hedge America.’
U.S. stocks have rallied, but the dollar’s slide and slowing foreign purchases of Treasurys are warning signs
By Chelsey Dulaney, The Wall Street Journal, Feb. 12, 2026
The slide in the dollar to multiyear lows is the clearest sign that foreigners are nervous about the U.S., where they have invested $36 trillion into stocks and long-term bonds. Foreign purchases of U.S. Treasurys have slowed, and some investors, like European pension funds, have turned to sellers.
But U.S. stocks remain an outlier, continuing to draw money from overseas and helping indexes weather jitters related to artificial intelligence…
Foreign holdings of Treasurys hit a record $9.4 trillion in November, but the pace of buying has slowed to $422 billion in the year through November from $641 billion a year earlier. Some foreign central banks and investors, particularly in Northern Europe, have become outright sellers. …
China has shifted to using offshore intermediaries in places like Belgium and state banks to buy Treasurys, obscuring its real exposure. …But its real investments could be over $1 trillion…
Foreigners’ appetite for U.S. stocks wasn’t rattled last year by the White House’s policies. Foreigners bought $689 billion in stocks in the year through November, according to U.S. Treasury Department data, up sharply from $197 billion the previous year… [end quote]
Despite the investment of so much in the U.S. market the foreign indexes are rising faster than SPX.
Major changes in the investment decisions of nations and institutional investors will happen slowly. They are more likely to hedge than to sell outright.
Wendy