Despite a total inflow of $311.1 billion into U.S. assets, there was a notable outflow of $59.1 billion from U.S. residents investing in foreign securities, highlighting a tension between global interest in U.S. assets and domestic capital seeking higher yields abroad.

U.S. Treasury International Capital data for May 2025 shows net foreign acquisitions of long-term U.S. securities reaching $259.4 billion, driven by strong foreign demand, with private foreign inflows totaling $287.5 billion.

U.S. investors sold $50.8 billion in foreign equities, particularly in emerging markets, reflecting a cautious stance amid geopolitical tensions and divergent monetary policies.

Investment strategies should focus on sectors with growth potential like AI and renewable energy, prioritize high-grade U.S. Treasuries and corporate bonds, and employ active management to navigate ongoing market volatility.

In May 2025, foreign investments in U.S. equities surged to $103.9 billion, with a strong preference for sectors like technology and renewable energy, reflecting a strategic shift towards resilient industries amid macroeconomic uncertainties.

Geopolitical factors and monetary policies significantly influence capital flows, as the U.S. Federal Reserve's tightening has attracted foreign capital, while other regions like Europe and China have drawn U.S. investments abroad through their monetary policies and fiscal stimulus.

Demand for U.S. fixed income assets remained robust, with $119.6 billion flowing into Treasury bonds and $32.1 billion into corporate bonds, underscoring the continued safe-haven appeal of U.S. debt despite ongoing fiscal and inflation concerns.

The 10-year Treasury yield increased to 4.7%, creating an attractive yield premium for foreign investors, although risk-off sentiment led to outflows from speculative-grade bonds while high-grade corporate bonds continued to attract inflows.