JPMorgan Survey: Global Investors Shift to ‘Sell America’ Despite US Market Strength

Survey Highlights Growing Preference for European Equities Amid Rising U.S. Market Uncertainty

Global investors are increasingly moving away from U.S. equities despite the long-standing dominance of Wall Street, according to a recent JPMorgan survey conducted at its Global Markets Conference. The findings reflect a broader sense of caution over the U.S. economy’s policy environment, deficit trajectory, and international trade risks, with 36% of international investors betting on European stocks to outperform in 2025. In contrast, only 17% backed U.S. equities to lead global markets next year.

JPMorgan’s report, based on the opinions of 700 investors from 45 countries, shows rising skepticism about “U.S. exceptionalism” even though a full-blown recession is no longer the consensus view. According to the analysts, there is a mismatch between muted investor sentiment on U.S. growth and the buoyancy observed in risk asset trading, highlighting diverging perspectives between market pricing and institutional expectations.

Highlights:

• 36% of global investors expect European equities to lead in 2025 vs. 17% for U.S. equities.

• JPMorgan survey captures caution amid persistent fears over U.S. tariffs, fiscal deficit, and trade policy.

• Despite muted optimism, Wall Street strategists continue to forecast U.S. market strength over the long term.

Rise of “Sell America” Trade Reflects Deepening Concerns Over U.S. Valuations and Policy Volatility

Years of strong gains for U.S. stocks have been underpinned by foreign capital inflows, robust corporate earnings, and technological innovation. However, investors now appear rattled by lofty valuations, AI-induced structural shifts, and intensifying concerns about policy instability. The JPMorgan survey confirms a growing trend of international portfolio diversification away from U.S. assets, with some sovereign wealth funds beginning to reduce exposure to Treasuries and dollar-denominated investments.

Europe, by contrast, has benefitted from more attractive equity valuations and stronger-than-expected earnings momentum. The Stoxx Europe 600 index is up 7% year-to-date, while the S&P 500 has declined approximately 1%, underscoring the appeal of European exposure. JPMorgan notes that the macro backdrop — particularly central bank stances and regional fiscal discipline — has added to Europe’s perceived stability, leading to a rotation out of U.S. equities into European markets.

Highlights:

• European stocks are outperforming U.S. peers in 2025 YTD; Stoxx 600 up 7%, S&P 500 down 1%.

• International investors are cautious of inflated U.S. stock valuations and unpredictable economic policy.

• AI disruptions and deficit-driven worries are weakening confidence in “U.S. exceptionalism.”

Wall Street Remains Bullish on U.S. Equities Despite Global Sentiment Shift

While global investors are rebalancing portfolios away from the U.S., major Wall Street firms are urging clients not to write off America’s market leadership too quickly. Morgan Stanley expects U.S. dominance to persist through at least 2026, driven by AI-driven earnings tailwinds, policy accommodation, and resilient mega-cap growth. The bank believes short-term volatility will eventually give way to renewed investor confidence.

Goldman Sachs echoed this sentiment, emphasizing the continued relevance of the “Magnificent Seven” tech stocks as the S&P 500’s primary growth drivers. Despite earlier concerns over high multiples, Goldman claims these mega-caps are now trading at relatively discounted valuations, making them an attractive option for investors seeking defensive exposure with upside in a turbulent global landscape.

Highlights:

• Morgan Stanley sees U.S. market leadership intact through 2026 despite short-term concerns.

• Goldman Sachs backs mega-cap U.S. tech stocks to drive S&P 500 gains this year.

• Wall Street remains bullish even as foreign investor flows trend elsewhere.

Recession Odds, Tariff Risks, and Treasury Sell-Off

The JPMorgan survey also provided insight into critical macroeconomic themes shaping investor behavior. Conference participants pegged the likelihood of a U.S. recession at 40%, suggesting that while a downturn isn’t the base case, economic damage from tariffs and slower business investment has already materialized. Analysts warned that new tariff threats could further pressure consumption and capital expenditure.

Trade relations are expected to remain a major headwind. While some optimism surrounds China-U.S. de-escalation, negotiations with the European Union are turning contentious. On Truth Social, former President Trump recently proposed a 50% tariff on EU goods beginning June 1, raising the risk of retaliatory measures that could strain transatlantic trade and investment flows.

Meanwhile, foreign dumping of U.S. Treasuries is projected to continue, as inflation volatility, central bank credibility concerns, and political infighting erode the safe haven appeal of U.S. bonds. JPMorgan forecasts the 10-year Treasury yield will end 2025 at 4.35% and expects gold to benefit from reserve diversification. The bank estimates that even a 0.5% shift in foreign U.S. asset holdings into gold could trigger a price rally to $6,000/oz by early 2029.

Highlights:

• U.S. recession odds pegged at 40%, with economic damage already evident from tariffs.

• Trade tensions with EU expected to worsen following proposed 50% Trump tariff.

• Treasury market losing global appeal; gold seen as key beneficiary in long-term asset shift.