A decade of “American exceptionalism” is facing its first serious challenge. In a recent survey, nearly half of institutional investors said they are reducing their long‑term exposure to U.S. assets, citing concerns over ballooning deficits and a weakening dollar reuters.com. The shift comes amid escalating tariff battles: the Trump administration’s latest duties on dozens of trading partners have reignited fears of higher inflation and slower growth. While trade deals earlier this year lifted the S&P 500 to a string of record closes, investors are increasingly uneasy that U.S. stocks are priced for perfection reuters.com.
Some money managers are rotating into Europe, China and other emerging markets, arguing that valuations abroad are more attractive and policy risks less acute. The U.S. tech sector’s heavy weighting in major indices—roughly one‑third of the S&P 500—makes the index particularly sensitive to any earnings disappointments. With the dollar down about 8 % this year and fiscal deficits ballooning, even stalwarts like State Street are urging clients to rebalance. The bottom line: the “market crown” isn’t lost yet, but it’s sitting a little crooked
