Foreign purchases of U.S. stocks surpass U.S. Treasuries for the first time, challenging the myth of 'risk-free assets'.

BlockBeats news, September 15 — According to Deutsche Bank analysis, in the year through June of this year, international capital inflows into the U.S. stock market averaged the equivalent of 2.8% of U.S. GDP, while inflows into U.S. Treasuries were only 2%. Apart from the period after the global financial crisis and during the COVID-19 pandemic, this is the first time this century that foreign purchases of U.S. equities have exceeded those of U.S. debt.

Analysts believe global capital is shifting from U.S. government bonds to U.S. stocks driven by the AI boom. At the same time, U.S. government debt has surpassed $40 trillion, the fiscal deficit continues to widen, the 10-year Treasury yield recently broke above 5% for the first time since 2023, and the 30-year yield also rose above 5.3%, heightening investor concerns about the traditional "risk-free asset" status of U.S. Treasuries.

Deutsche Bank believes this reflects the continued expansion of U.S. private-sector balance sheets while public-sector balance sheets keep deteriorating. James Turner, head of fixed income at BlackRock, said that given the current level of U.S. government deficits, if the United States were a company, its condition could by no means be called "risk-free."

Meanwhile, U.S. equities remain supported by AI earnings growth. The S&P 500 has risen about 12% year to date, with constituent earnings in the second quarter of 2026 growing 52% year over year, and still up 34% after excluding special factors such as Amazon and Alphabet.

Deutsche Bank pointed out that changes in foreign allocation logic could also reshape the dollar's pricing mechanism: the dollar may in the future be driven more by capital inflows into U.S. equities rather than the traditional "safe-haven buying of Treasuries, stronger dollar." However, Robeco warned that if Treasury yields continue to climb and push up corporate financing costs, a sharp bond market adjustment could ultimately still backfire on U.S. equities.