On July 31, 2026, the latest International Capital Flows (TIC) report released by the US Treasury showed that foreign investors' net purchases of US stocks in June reached $85 billion, bringing the cumulative net purchase amount in the first half of 2026 to $512 billion, setting a record high for the same period in history. This figure is an 18% increase from the same period in 2025 and far exceeds the market expected $450 billion, showing that global capital is flowing into the US stock market at an unprecedented speed.
Foreign Investors' Holdings of US Stocks Doubled in Five Years
The report indicates that as of the end of June, the total market value of US stocks held by foreign investors has risen to $11.2 trillion, accounting for 15.5% of the total market value of US stocks, the highest level since the 2008 financial crisis. Among them, Japan, the United Kingdom, Canada, and Switzerland were the countries with the largest increases in holdings. Notably, the proportion of individual investors in Asia participating in US stocks through cross-border ETFs and online brokerage channels has significantly increased, showing a new coexistence pattern of "retailization" and "globalization".
Where Does the Attractiveness of US Stocks Come From?
Why are global funds intensively adding to US stocks at this time? Many institutions believe that behind this is the resonance of three logics: fundamentals, institutional aspects, and capital flows.
Economic Resilience Strengthens Fundamental Confidence
The US economy has maintained healthy expansion after a rapid interest rate hike cycle. On July 30, data from the US Commerce Department showed that Q2 GDP grew at an annualized rate of 2.4%, higher than the expected 1.8%. At the same time, personal consumption expenditure remained strong, and corporate capital expenditures recovered. This provides a good macroeconomic foundation for corporate profit growth. It is expected that the annual profit growth rate of S&P 500 companies may reach 9%, better than年初 expectations.
Open and Transparent Market Environment Forms a "Magnetic Effect"
The US stock market has the world's most complete regulatory system, the highest information transparency, and the most diverse financial instruments (ETFs, options, REITs, etc.), which can meet the risk-return needs of various investors. At the same time, the daily trading volume of US stocks often exceeds $500 billion, and sufficient liquidity makes it basically unaffected by large capital inflows and outflows. These institutional advantages together constitute the core "moat" of US stocks.
Global Asset Allocation Rebalancing Demand
Currently, the European economic recovery is weak, and some emerging markets face exchange rate volatility and capital outflow pressures. Against the background of global "asset shortage", US stocks, as the only market in the world that combines scale, liquidity and profitability, naturally become the first choice for international capital reallocation. In addition, although the US dollar exchange rate has fallen somewhat, from the perspective of purchasing power, the actual return of dollar assets still has attractiveness.
Seeing the Truth from Data: Which Sectors Do Foreign Capitals Prefer?
According to the sub-item data in the TIC report, foreign capital increases are mainly concentrated in the following sectors:
- Tech sector (42%): Represented by artificial intelligence, cloud computing, and semiconductors.
- Financial sector (18%): Benefiting from improved interest rate environment.
- Industrial sector (12%): Driven by infrastructure spending and manufacturing回流.
The increase in the three major sectors combined exceeded $270 billion.
Outlook for the Second Half: Inflow Trend of Foreign Capital Is Expected to Continue
Looking ahead, Wall Street mainstream views remain optimistic about US stocks. Goldman Sachs, JPMorgan and other major banks have recently raised their year-end target points for the S&P 500 index to 6,200 and 6,350 points respectively. It is believed that under the promotion of falling inflation, soft landing expectations, and technological changes, the profit growth prospects of US stocks are still clear, which will continue to attract overseas capital回流.
However, there are also cautious views pointing out that US stock valuations are approaching historical highs. If future corporate earnings cannot meet expectations, it may trigger fluctuations. Therefore, while following the footsteps of foreign capital, investors should also maintain diversified allocation and risk management awareness to avoid excessive exposure to a single asset.
Overall, the record purchase of US stocks by foreign capital in the first half of 2026 is a vote of firm confidence in the US stock market by global capital. For Chinese investors who want to allocate overseas assets, understanding the deep logic of this trend will help better grasp the direction and rhythm of global allocation.
