"End of the 'Trump Trade'? Investors Accelerate 'De-Americanization'"

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Trump's return to the White House once ignited global investors' enthusiasm for U.S. assets, but this passion is reversing at an astonishing speed. Global capital is systematically avoiding U.S. markets and instead flowing into European and Asian assets, with a profound global investment portfolio rebalancing truly underway.

On February 25, Katie Martin, a columnist for the UK's Financial Times, pointed out that this year, the U.S. S&P 500 index has seen a slight decline, while global stock indices excluding the U.S. have risen as much as 9%, far surpassing the MSCI global index's rise of about 2% including the U.S. This contrast means this year is likely to be the worst relative performance for U.S. stocks since 1995.

U.S. tech stocks are under pressure, policy uncertainty continues to ferment, and combined with economic growth slowing to an annualized, moderate level of 1.4%, these factors are collectively shaking the core appeal of U.S. assets. Meanwhile, expectations of European fiscal expansion are rising and signs of a turnaround are appearing in Germany’s economy, making European assets the biggest beneficiaries of this wave of capital reallocation.

Passion remains, direction changed

The article points out that fund managers' overall enthusiasm for risk assets currently is basically unchanged from after Trump’s victory at the end of 2024; investors are not pessimistic, but the focus of their enthusiasm has fundamentally shifted.

At the end of 2024, market excitement centered on expectations for deregulation and fiscal stimulus from the new U.S. government. At that time, the dollar strengthened and U.S. stocks led global markets, with the U.S. seen as the engine "pulling away" growth momentum from other developed economies. However, entering the second year of Trump's second term, this narrative has quietly collapsed.

Since the end of last December, U.S. stocks have fluctuated within an unusually narrow range, neither plunging nor rising effectively. Worth noting is that even when Trump's power was limited (such as last week when he lost in a tariff lawsuit), the U.S. market failed to rebound. This detail shows that the market's indifference is not simply due to policy concerns, but more deeply rooted in fundamental changes in capital flows.

Europe's "Sleeping Beauty" awakening moment

According to regular investor surveys by Bank of America Merrill Lynch, the current global investor overweight on eurozone assets has hit a record high. In a special European survey, more than one-third of respondents said they hold above-benchmark allocations of EU stocks, while three months ago this proportion was just 9%. Meanwhile, a net 22% of respondents reported underweight allocations to U.S. stocks, compared to just 6% at the end of 2025.

The article mentions that French asset management company Carmignac likened this phenomenon to the awakening of "Sleeping Beauty," believing that both structural and cyclical factors are jointly driving renewed favor for European assets. Large amounts of capital are flowing into European equity funds, as investors seek to diversify concentrated tech risks and to avoid the spillover impact of U.S. domestic political risks.

The advancement of Germany's large-scale fiscal spending plan has restored confidence in its economic prospects, and although eurozone business survey data is not yet dazzling, it shows signs of improvement.

Tech stock stall intensifies U.S. asset stress

Analysis states that the core pillar supporting the U.S. investment myth of the past ten years—tech stocks’ outperformance—is being shaken. Although whether the recent pullback in AI-related stocks is short-term fluctuation or a trend reversal remains to be seen, the anxiety brought by AI’s impact on the tech sector is accelerating the capital shift from the U.S. to Europe.

Meanwhile, U.S. economic data also shows weakness. The latest annualized growth is only 1.4%, far below previous market expectations of robust expansion, and instead closer to Europe's slower pace. The Financial Times commentary notes that the stall in tech stocks, cooling of the economy, and political turmoil amount to triple pressures that are collectively battering the attractiveness of U.S. assets.

Risk warning and disclaimerThe market has risks, and investment requires caution. This article does not constitute personal investment advice, nor does it take into account the unique investment goals, financial situation, or needs of individual users. Users should consider whether any opinions, views, or conclusions in this article suit their specific situation. Invest accordingly at your own risk. ```