America’s dominance of global markets is no longer a sure thing. This summer a survey of institutional investors and consultants overseeing $4.9 trillion in assets found that 47 % were cutting their long‑term allocations to U.S. equities, a dramatic reversal from attitudes two years ago reuters.com. Growing deficits and a weak U.S. dollar—down about 8 % this year—have rattled faith in the “American exceptionalism” that underpinned the post‑pandemic bull market. The Trump administration’s escalation of tariffs against Canada, Brazil, India and Taiwan has injected fresh uncertainty; although trade deals struck with Europe, Japan and South Korea lifted stocks to record highs, a new salvo of duties spooked investors reuters.com.
Economists warn that the latest tariffs are fuelling inflation. U.S. consumer prices jumped at the fastest pace in five months in June, while other data point to weakening economic activity and fragile import demand reuters.com. For the first time in a decade, analysts are openly questioning whether U.S. assets will continue to outperform. State Street Investment Management’s Lori Heinel calls the market’s standing “bruised,” noting that deficits make it less attractive to hold dollar‑based investments reuters.com. Some strategists still see U.S. innovation as a long‑term advantage, but many advise clients to take profits and rebalance toward Europe, China and other emerging markets reuters.com.
