Bank of America said U.S. stocks have become significantly less attractive than their global counterparts, marking the biggest decline in more than five years.
The bank explained that since the start of the year, just $26 of every $100 of inflows into global equity funds has attracted US stocks, the lowest share since 2020, compared to a record peak of $92 per $100 in 2022.
The bank cited strategic analyst Michael Hartnett as saying that these numbers reflect a decline in the phenomenon of so-called “American exceptionalism,” or the sustained dominance of American markets, where momentum declines not because of a record of large exits, but because of a decline in relative inflows into American assets.
While the S&P 500 index remained mostly stable in 2026, the MSCI World Index (excluding the US) recorded an increase of about 8%.
artificial intelligence technology
In addition to an increased preference for cyclical stocks that benefit from faster economic growth, concerns about overspending by big technology companies on artificial intelligence technology and a weakening dollar caused by President Donald Trump’s administration have dampened investors’ appetite for U.S. stocks.
Equity funds in Europe, Japan and other international developed markets have raised about $125 billion since the start of the year, compared to just $35 billion in the U.S. market, according to a note published by Bank of America strategists based on data from EPFR Global.
The flow figures confirm Hartnett’s comments earlier this month that U.S. trade policy is helping to shape a “new world order,” underscoring his prioritization of international stocks from late 2024 onwards.
