Global Investors Abandon US Markets as Tariff Crisis Deepens

A landmark Bank of America survey has revealed that institutional investors are fleeing US stock markets in unprecedented numbers as President Trump’s aggressive tariff policies drive global growth expectations to their lowest levels in three decades.

The research indicates a significant shift away from the US dollar, with investors growing increasingly concerned about the impact of tariffs on the world’s reserve currency. The bank’s monthly survey, conducted during the administration’s recent “liberation day” announcements, shows money managers expressing their most pessimistic outlook on the greenback in nearly 20 years.

The comprehensive study, encompassing 164 investors managing £386 billion in assets, discovered that a net balance of 61 per cent anticipate dollar depreciation over the coming year – the highest proportion since May 2006. More than two-thirds of respondents deemed the US currency overvalued, marking the most bearish sentiment since 2022.

Traditional safe-haven assets have seen record inflows, with gold and bonds becoming increasingly favoured. The exodus from US equities has been particularly severe, with industrial, technology, and banking sectors bearing the brunt of the sell-off. Defensive sectors, such as utilities, have reached their highest demand levels in two decades.

David Folkerts-Landau, Deutsche Bank’s group chief economist, characterised the situation as “a dollar confidence crisis,” suggesting it could represent the most significant disruption to global financial and trading systems since the 1971 Bretton Woods collapse.

The survey, conducted between 4-10 April, highlighted that global recession fears have reached their fourth-highest level in 20 years. Inflation expectations have surged to their highest point since 2021, with one-third of investors anticipating two Federal Reserve interest rate cuts this year. Gold prices have responded accordingly, reaching a record £3,300 per ounce as investors seek refuge from market volatility.