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Slice of pie

The US stock market has become the global market over the last 60 years. Will that continue?

Goldman Sachs sees another $300 billion from foreign investors flowing into US stocks this year, even as tariff risks loom and growth forecasts are slashed.

Hyunsoo Rim

3/24/25 12:20PM

Foreign investors hold a record slice of America’s $93 trillion stock market — and they might not let go anytime soon.

As of Q4 2024, overseas investors owned $16.5 trillion, or 18%, of US equities, the highest share on record, according to Federal Reserve data. That’s up from 8% in 2000 and just 2% in the 1950s.

Foreign ownership US stocks — Sherwood News

TINA

As globalization gripped the world, the American stock market became the go-to investment for trillions of dollars of capital. With the world’s largest and most innovative companies like Apple and Nvidia in the United States, if you were an institutional investor in India or an individual in Italy, there was no alternative to buying US stocks.

But with protectionist policies like tariffs looming and US stocks seeing a sluggish start to 2025 — the SPDR S&P 500 Trust is down 3% year-to-date, lagging Europe’s STOXX 600 (up 9%) and China’s CSI 300 (up 1%) — is growing foreign ownership a trend that’s likely to continue?

Researchers from Goldman Sachs, led by David Kostin, outlined in a note published Friday why they believe foreign investors will keep buying. They argued that the US market’s size and liquidity — the S&P 500 is 4x the size of Europe’s STOXX 600 and 8x bigger than China’s CSI 300 — makes it impossible to ignore for global investors looking to invest large sums.

Furthermore, though slowing growth has become a concern on Wall Street, Goldman still expects S&P 500 earnings to grow 7% annually in 2025 and 2026, outpacing Europe’s 4% and 6% growth in the same period. They also observed that a weakening US dollar — which makes US stocks cheaper for overseas buyers — could support buying: the bank expects global investors to pour another $300 billion into US equities this year, roughly matching last year’s inflows.

Of course, any significant deterioration of the fundamental US economic picture could push investors to look elsewhere.

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Powering the positive earnings report was the company’s AI-related revenue, which grew 84% in the fourth quarter and now makes up over a third of total revenue. Investors seem to think the increased demand for servers could have trickle-down effects for other companies.

“The company’s results and commentary reinforced the outlook for strong AI-infrastructure demand while indicating resilient broader traditional server and storage spending,” wrote Woo Jin Ho, a senior technology analyst at Bloomberg Intelligence. “Lenovo’s $21 billion AI-server pipeline and remarks that demand is outpacing supply support Dell’s AI-demand momentum and point to robust orders.”

AI’s insatiable computing demand is reshaping the hardware industry and driving up server demand.

Dell will report first-quarter earnings on Thursday, May 28.

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Ross Stores surges as Q1 results beat expectations, full-year guidance raised

Ross shares are rising after the company delivered strong Q1 results, with sales topping Wall Street’s projections.

The stock soared 6.3% just after the open.

Key numbers:

Earnings per share of $2.02 vs. $1.47 year over year (estimate: $1.72).
Sales of $6.01 billion, up 21% year over year (estimate: $5.61 billion).
Comparable sales growth of 17% (estimate: 8.58%).

CEO Jim Conroy attributed the results to better traffic in stores. “Customer traffic was the primary driver of the strong sales trend as compelling merchandise assortments, higher customer acquisition and engagement from our ongoing marketing initiatives, and an improved in‑store experience are resonating with shoppers.”

The company also noted that transaction volume grew across all key demographics, including “income levels, ethnicities, and age groups, including younger customers.” Sales were also likely buoyed by standard seasonal tailwinds, including consumer spending from tax refunds.

Backed by the strong quarter, the company lifted its full-year targets. Ross now projects same-store sales growth of 6% to 7%, up from the prior forecast of 3% to 4%, topping Wall Street’s estimate of 4.64%. It boosted its annual EPS guidance to a range of $7.50 to $7.74, versus the prior outlook of $7.02 to $7.36.

Ross Stores has been one of the retail sector’s standout performers this year, rising around 20% year to date as of Thursday’s close.