According to BlockBeats on Sept. 15, Deutsche Bank said international inflows into U.S. equities averaged 2.8% of U.S. GDP in the year through June, while inflows into U.S. Treasuries came in at 2%.
Excluding the period after the global financial crisis and the COVID pandemic, the bank said this is the first time this century that foreign buying of U.S. stocks has exceeded purchases of U.S. government bonds.
Deutsche Bank said global capital is shifting from U.S. government debt to American stocks, with the AI boom supporting that move. The backdrop is a Treasury market facing heavier scrutiny: U.S. government debt has surpassed $40 trillion, the fiscal deficit keeps widening, the 10-year Treasury yield recently moved above 5% for the first time since 2023, and the 30-year yield rose to more than 5.3%.
The bank said the move reflects continued expansion in U.S. private-sector balance sheets and ongoing deterioration in public-sector balance sheets. James Turner, BlackRock's head of fixed income, said that at the current level of U.S. government deficits, if the United States were a company, its condition could not be called "risk-free."
U.S. equities, meanwhile, are still being supported by AI-driven earnings growth. The S&P 500 is up about 12% so far this year. Earnings for index constituents in the second quarter of 2026 rose 52% from a year earlier, and still showed 34% growth after excluding special factors related to companies including Amazon and Alphabet.
Deutsche Bank also said the shift in foreign allocation logic could reshape how the dollar is priced. In its view, the dollar may increasingly be driven by inflows into U.S. equities rather than the traditional pattern of investors buying Treasuries in risk-off trades and the dollar strengthening alongside that move.
Robeco, however, warned that if Treasury yields continue to rise and lift corporate financing costs, a sharp adjustment in the bond market could still hit U.S. stocks in the end.