European foreign investors have sold $63 billion in US stocks since early March. Goldman Sachs: this is not a cause for concern.

Since early March, foreign investors have quietly withdrawn $63 billion from the US stock market, with Goldman Sachs indicating that the largest sellers are in Europe. While other regions have been steadily buying, this capital flight is concerning. Why is this happening? By 2025, foreign investors' total stake in the US stock market is expected to reach a record 18%. This is not a trivial amount - this level of risk exposure, even if slightly reversed, could potentially shake the entire market valuation. Goldman's Chavez and his team have not labeled it as panic yet, but they are keeping an eye on it. Looking back at history, there have been 10 similar sell-offs in the stock market since 1980, each time representing about 0.6% of the total market value. Compared to these, the latest sell-off has been shorter in duration and more moderate. However, timing is crucial. This sell-off coincides with investors questioning the Federal Reserve's next moves and whether the stock market rally driven by artificial intelligence has gone too far. Nonetheless, historical experience provides a strange reassurance. In the past 10 instances of foreign investors selling US stocks, the market actually rebounded in 7 of them. Tech stocks like Tesla and Nvidia are still riding the wave of structural growth, so they may continue to attract domestic capital even as foreign funds withdraw. The real question is: does this sell-off mark the beginning of a deeper global stock market rotation, or is it just a temporary pause before foreign capital returns?