A slight sell-off by foreign investors could rock the US stock market, says veteran CIO

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After spending the week chatting with planetary investors, economists, and satellite leaders astatine the International Monetary Fund's (IMF) yearly outpouring meetings successful D.C., erstwhile Bridgewater main concern serviceman Rebecca Patterson is acrophobic the marketplace has gotten excessively upbeat aft its aboriginal April Trump tariff rout.

"The biggest [takeaway] to maine was a work connected the non-US investor, the planetary capitalist close now. And I'm talking astir ample organization investors, radical who tally ample pension funds, sovereign wealthiness funds, and they're rethinking the United States," Patterson told maine connected Yahoo Finance's Opening Bid podcast

Patterson is simply a elder chap astatine the Council connected Foreign Relations. She's besides an autarkic manager astatine Vanguard, a planetary plus manager with much than $10 trillion successful assets nether management. She was antecedently the main concern strategist astatine Bridgewater Associates, the world's largest hedge fund.

"I deliberation determination is simply a caller hazard premium connected US assets arsenic seen by overseas investors that did not beryllium earlier the Liberation Day, possibly earlier the medication started ... The Treasury Department estimates we person astir $30 trillion of US equity and enslaved holdings by overseas investors," Patterson said.

If, for example, a Canadian pension money decides to chopped allocation to US stocks and bonds by 2% each — 4% full — it's a tiny accommodation for the fund. But if each overseas investors bash so, "$1.2 trillion would permission US assets," Patterson explained.

Her cautiousness is antagonistic to what investors person witnessed since mid-April, arsenic the Trump medication has shown a willingness to speech tariff deals.

Read more: The latest quality and updates connected Trump's tariffs

The S&P 500 (^GSPC) has seen a four-day rally successful spite of a bid of mixed net reports from the likes of household sanction companies specified arsenic PepsiCo (PEP). Downright atrocious ones from companies similar Tesla (TSLA) person been decently received, with that banal up 25% successful the past 5 trading sessions.

The benchmark scale is up 12% from its April 8 trough (but inactive down 10% from its mid-February peak).

Japan's Topix Index closed Monday astatine 2,650.61, conscionable supra the adjacent connected April 2 earlier Trump unveiled his tariff scheme.

The safe-haven golden commercialized that has dominated 2025 has cooled a touch.

The guardant price-to-earnings aggregate connected the S&P 500 present stands astatine 19.9 times and is acold removed from valuations seen during recessionary periods, according to information from BCA Research main strategist Peter Berezin.