Wall Street investment bank Goldman Sachs (GS) says foreign investors have sold a net $63 billion U.S. of American stocks since the start of March when the tariff drama started.
Data from Goldman Sachs shows that most of the selling has come from Europe, while other regions of the world such as Asia and South America have continued to buy U.S. equities.
“This dynamic poses a substantial risk to equity valuations because foreign investors entered 2025 with a record 18% ownership share of U.S. equities,” wrote Goldman Sachs in a note to clients.
The Wall Street firm adds that, since 1980, there have been 10 other instances of substantial selling of U.S. stocks by foreign investors, with sales reaching as much as $300 billion U.S. in the most extreme cases.
However, Goldman says that the most recent episode of foreign selling “has been shorter and shallower than the average experienced during the last few decades.”
The investment bank also notes that foreign outflows from U.S. stocks haven’t always been a bad thing for the market.
In the past, U.S. stocks were able to withstand foreign outflows, rising during seven out of 10 occasions with 1987, 1990 and 2022 being the lone exceptions when markets sank.
News of the foreign sales of U.S. stocks comes as Bank of America (BAC) urges investors to stay out of the market for the time being.
Bank of America says investor sentiment remains fragile and that share prices are likely to move lower as the full impact of U.S. President Donald Trump’s trade tariffs on companies and the American economy becomes clearer in coming months.
The stock of Goldman Sachs is down 5% this year and trading at $544.86 U.S. per share.
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