Foreign investors have quietly pulled $63 billion from U.S. equities since early March—and Goldman Sachs (GS, Financial) says the biggest sellers are in Europe. Despite steady buying from other regions, this pullback is raising alarms. Why? Because heading into 2025, foreign investors owned a record 18% of the entire U.S. equity market. That’s not a small stake—it’s the kind of exposure that, if reversed even slightly, can shake valuations across the board.
Goldman’s Daniel Chavez and his team aren’t calling it a panic just yet—but they’re paying attention. Historically, there’ve been 10 similar selloffs since 1980, each unloading about 0.6% of the total market cap—roughly $300 billion today. Compared to those, this latest wave has been shorter and milder. But timing matters. This one’s landing right as investors are questioning the Fed’s next move, China’s stimulus outlook, and whether the AI-fueled rally has gotten ahead of itself.
Still, history offers a strange kind of comfort. In 7 out of the last 10 times foreign investors dumped U.S. stocks, the market actually rallied. Tech names like Tesla (TSLA, Financial) and Nvidia (NVDA, Financial) are still riding structural growth waves and may keep attracting local capital, even as overseas funds step back. The real question: does this selling mark the start of a deeper global rotation—or just a pause before foreign capital comes flooding back in?
