Foreign investors held a record $23.2 trillion worth of U.S. equities in April, adding about $2 trillion in a single month as overseas demand for American stocks continued to climb. The increase more than doubled foreign holdings from levels seen during the 2022 bear market and marked a sharp rise from roughly $7.5 trillion during the 2020 pandemic, according to data shared by The Kobeissi Letter.

Foreign Holdings Hit Fresh Record

Much of this year's gains have been driven by large-cap technology stocks, with AI-linked companies continuing to attract the biggest share of investor capital. Technology giants, including Nvidia Corp., Microsoft Corp. and Meta Platforms Inc., have helped propel the S&P 500 and Nasdaq to fresh highs this year, attracting additional overseas capital.

Foreign investors now own about 30.5% of the roughly $76 trillion U.S. equity market, The Kobeissi Letter said. The data showed that foreign investors' allocation to U.S. equities as a share of their U.S. financial assets has climbed to 63%, the highest level on record and about 10 percentage points above the peak reached during the dot-com bubble in 2000.

Market Performance and Regulatory Context

In May, China tightened cross-border stock trading rules in an effort to limit domestic investors who were moving record amounts of capital into U.S. and Hong Kong equities. The S&P 500 index has gained 7.29% year-to-date, while the Nasdaq composite index has risen 9.64% so far this year.

The SPDR S&P 500 ETF Trust and Invesco QQQ Trust, which track the S&P 500 and Nasdaq-100 indexes, are up 7.33% and 15.90%, respectively, this year.