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Investors are increasingly souring on the United States, as illustrated by the declining dollar, the stalled stock market and rising government borrowing costs.
The U.S. stock market has plateaued in dollar terms since the start of the year and started to slide when measured in other currencies.Credit...Karsten Moran for The New York Times
Jan. 31, 2026, 5:02 a.m. ET
A new investment thesis has spread through global markets at the start of 2026, as trading strategies long built on the primacy of the United States now opt for a new approach: Sell America.
The sentiment started to take hold in financial circles after the shock of sky-high tariffs sent stocks and bonds into a tailspin last April, but it has taken off recently as …
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Investors are increasingly souring on the United States, as illustrated by the declining dollar, the stalled stock market and rising government borrowing costs.
The U.S. stock market has plateaued in dollar terms since the start of the year and started to slide when measured in other currencies.Credit...Karsten Moran for The New York Times
Jan. 31, 2026, 5:02 a.m. ET
A new investment thesis has spread through global markets at the start of 2026, as trading strategies long built on the primacy of the United States now opt for a new approach: Sell America.
The sentiment started to take hold in financial circles after the shock of sky-high tariffs sent stocks and bonds into a tailspin last April, but it has taken off recently as the Trump administration has pursued policies like attacks on the Federal Reserve’s independence and threats of a new trade war with Europe that are worrying investors anew.
The “ex-America” trade was a strikingly common theme at New York Life Investments’ global investment meeting earlier this month, said Lauren Goodwin, an economist at the company.
“Our European colleagues were frankly stunned by the openness that U.S. investors have to diversify away from the U.S.,” she said.
Ms. Goodwin and other investors stress that the sell America trade is more about hedging existing U.S. exposure, diversifying into other assets and deciding where to invest new money, rather than an attempt to leavethe country entirely.
But over the past month, that trading has fueled the sliding value of the dollar, stalled the stock market’s rise, increased government borrowing costs and sent the prices for precious metals like gold soaring.
The nomination of Kevin Warsh to be the next chair of the Federal Reserve and a last-minute deal to fund most of the government helped the dollar on Friday. Yet the currency still ended the month 1.2 percent lower after its second straight week of losses, when measured against a basket of currencies including the euro, British pound and Japanese yen. By that same measure, the dollar is 10 percent lower over the past 12 months, a huge drop for the typically strong currency.
Gold and silver, which remain safe haven investments in times of turmoil, both hit record highs recently. And even after a sharp drop on Friday the precious metals are still up 24 and 19 percent for January, with the price of gold 75 percent higher over the past 12 months.
After a relentless rally, the U.S. stock market has plateaued since the start of the year and started to slide when measured in other currencies.
“It’s been almost a paradigm shift in the dollar,” said Adam Turnquist, chief technical strategist at LPL Financial. For international investors, the change is particularly acute. “U.S. equities were working as the dollar moved higher,” said Mr. Turnquist. “That’s unraveled.”
On Tuesday, President Trump heralded the sustained weakness of the dollar for making U.S. products cheaper for the rest of the world to buy. The comments alarmed investors who had become used to a longstanding U.S. policy of supporting strength for the nation’s currency.
The next day Scott Bessent, the Treasury secretary, sought to reassure the markets that, contrary to the president’s comments, the government still supports a strong dollar and that the long stretch of U.S. exceptionalism that has dominated investing strategies for more than a decade was still intact.
“If we have sound policies, the money will flow in,” he said.
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Scott Bessent, the Treasury secretary, sought to reassure investors that the government still supports a strong dollar. Credit...Doug Mills/The New York Times
The U.S. economy has been the backbone of global growth, and American markets are unrivaled in size, with the ability to transact quickly and easily. The dollar remains at the heart of global trade.
The move away from the United States is being driven by more fundamental concerns: unease about the safety of U.S. markets at a time of geopolitical upheaval, threats against the nation’s central bank, ballooning government debt and worries over the fundamental rule of law.
Some investors also feel whipsawed by the White House’s pattern of erratic policymaking.
“I’m not trying to be political. It’s just incredibly frustrating,” said Ms. Goodwin. “Key aspects of this administration’s economic agenda conflict with each other.”
Other market watchers echoed Ms. Goodwin’s sentiment. “It’s hard as a strategist right now when you have this push and pull in what the administration is doing,” Mr. Turnquist said.
Despite the administration’s rhetoric on tackling affordability, analysts and even some policymakers say trade tariffs and the failure to tackle government spending have made things worse.
The 10-year U.S. Treasury yield, which moves inversely to its price and reflects the government’s borrowing cost over 10 years, has risen to 4.25 percent from less than 4 percent in October — equivalent to a standard rate hike from the Federal Reserve, which is the opposite of what the president wants.
Some of that rise in yields, as the administration has argued, was rooted in a sharp sell-off in Japanese bond markets spilling over to U.S. Treasuries.
Still, investors lament the added political impact.
“You might like a weaker dollar, but you don’t like higher interest rates,” said Steve Englander, a currency strategist at Standard Chartered. “And if it shows up as weaker demand for U.S. equities, that’s also not a good thing.”
Over the past 10 years, a dollar invested in the S&P 500 would have quadrupled in value. Investing that dollar in European stocks would have realized half that gain, based on the performance of the Stoxx 600 index.
With such steady and consistent outperformance, the weighting toward Wall Street in widely tracked global benchmarks increased. U.S. stocks make up roughly 70 percent of the MSCI All World index, up from close to 50 percent a decade ago, resulting in global investors slowly becoming more dependent on the performance of the U.S. market.
That alone has made some investors wary, especially with U.S. stocks soaring to such lofty heights on the promise — but not yet reality — of what artificial intelligence will bring.
The weakness of the dollar has been cutting into foreign investors’ returns in the U.S. stock market. It is also making foreign stocks more attractive to U.S. investors, further incentivizing money to travel abroad.
Over the past 12 months, that same European index, the Stoxx 600, has gained nearly 30 percent in dollar terms, twice as much as the S&P 500, with the slide in the American currency roughly doubling the investment return in Europe. The two indexes have performed more similarly when denominated in their respective local currency.
Earlier iterations of the sell America trade were confined to big central banks seeking less dependence on the United States after Russia invaded Ukraine and had its dollar assets seized by American officials.
Those asset seizures prompted concerns that sovereign assets once thought safe from harm could become ensnared in geopolitics. The safety of U.S. assets “started to get reassessed,” said Ryan McIntyre, president of Sprott Inc, a large gold investor.
China’s holdings of U.S. Treasuries have been in decline for nearly a decade, following the Trump administration’s first trade offensive against the country, but the drop accelerated after February 2021, falling from $1.1 trillion to less than $700 billion toward the end of last year, according to data from the Treasury Department. Brazil began to cut its Treasury holdings in 2019, with the drop accelerating over the past year. India has also cut its holdings sharply over the past year.
To buy Treasuries requires dollars, and selling Treasuries removes the need to hold dollars, weakening the currency. There isn’t one fiat currency that has been the standout beneficiary as the dollar has fallen, said analysts. Instead, money has primarily flowed into gold and other precious metals. The value of gold has roughly doubled in price over the past 12 months.
Data from the World Gold Council shows central bank purchases roughly doubling after Russia’s assets were seized and then accelerating again at the end of last year.
Recently, cash has also poured into exchange traded funds that allow private investors, often prohibited from buying physical commodities, to still bet on the price of gold, as they also seek a new haven away from U.S. assets.
“The world looks to the U.S. as a beacon of democracy and rule of law and I think that is starting to change a little bit, clearly,” said Mr. McIntyre. “This is not about risk-seeking. It’s about diversification and the reassessment of risk.”
Joe Rennison writes about financial markets, a beat that ranges from chronicling the vagaries of the stock market to explaining the often-inscrutable trading decisions of Wall Street insiders.
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