Global Capital Surge: US Markets See Record Inflows

Global capital is flowing into US markets at an unprecedented rate, with foreign investors acquiring US equities at record levels. This significant influx, totaling $646.8 billion in the 12 months ending September 2025, signifies a major shift in global risk appetite. Concurrent with this equity buying spree, there's a notable structural change in Treasury ownership. Foreign private investors purchased $492.7 billion in US Treasuries during the same period, indicating sustained demand for dollar-denominated assets.

The composition of foreign Treasury holders is undergoing a decades-long realignment. China's share of these holdings has decreased to 7.6%, its lowest point in 23 years. Conversely, the UK's participation has quadrupled, nearing its historical peak. Japan, while still the largest holder, has seen its share diminish over the past two decades. These shifts are reshaping sovereign and private capital flows, impacting market dynamics.

Domestically, US investors have also demonstrated an increased willingness to take on risk, channeling an extraordinary $900 billion into equity funds since November 2024. This robust domestic investment, coupled with substantial foreign inflows, paints a picture of strong capital demand for US assets. However, this enthusiasm for riskier assets is occurring against a backdrop of record-high US consumer debt, adding a layer of complexity to the economic outlook.