Record $646.8B Foreign Investment in US Stocks Signals Major Capital Flow Shift

Foreign investors purchased a record $646.8 billion in US equities in the 12 months ending September 2025, according to data cited by Yardeni Research, marking the highest level on record and surpassing the 2021 peak by 66%.

In the same period, foreign private-investor purchases of US Treasuries totaled $492.7 billion, with rolling 12-month non-US buying of Treasuries remaining above $400 billion for four consecutive years, reflecting persistent global demand for dollar-denominated safety.

The composition of foreign Treasury holders is shifting dramatically: China's share has fallen to 7.6%, the lowest in 23 years, while the UK's share has quadrupled to 9.4%, and Japan's share stands at 12.9%, down 26 points over 21 years.

Domestically, US investors have poured $900 billion into equity funds since November 2024, with half of that amount arriving in the last five months, as reported by JPMorgan. Fixed-income funds added another $400 billion, while all other asset classes combined attracted only $100 billion.

However, US credit-card debt hit a historic high of $1.233 trillion in Q3 2025, creating a divergence between market optimism and consumer financial strain.

JPMorgan projects the S&P 500 could reach 8,000 next year, reinforced by seasonal tailwinds, as December has historically been the strongest month for US stocks, rising 73% of the time since 1928 with an average return of +1.28%.

For cryptocurrency markets, these unprecedented capital flows indicate a major shift in global risk appetite and macro positioning, potentially influencing liquidity and sentiment toward digital assets as investors seek US assets amid a lack of attractive alternatives abroad.