"Sell America" Is Back — but the verified data says foreigners are still buying U.S. bonds and stocks

The “Sell America” trade typically means foreigners sell U.S. assets in a coordinated way—stocks, Treasuries, and often the dollar move lower together. But the latest hard evidence from the U.S. Treasury’s TIC framework shows something more nuanced: foreign flows have continued to appear net-buying of U.S. securities in the most recent monthly datapoint available from Reuters’ summary of TIC data, even as the narrative resurges.

Think of foreign allocation decisions as a supply chain. Upstream, reserve managers and central-bank-related entities decide how much of their USD exposure they’re willing to hold and in what instrument (bills vs. notes vs. long duration). Downstream, that translated exposure shows up in which U.S. markets get liquidity (Treasury auctions/secondary yields vs. equity baskets). The “Sell America” headline is downstream-visible (prices), but the verified TIC flows are about the upstream allocation rule (net buying/selling) and—crucially—whether foreigners are shifting from one U.S. bucket to another.

Even if total net flows aren’t screaming “exit,” the identity of the largest foreign holders matters because those holders can move the marginal price at key points of the curve. In the Treasury TIC “Major Foreign Holders” table (holdings at period end), Japan, the U.K., Mainland China, and Taiwan sit among the largest country holders. That concentration creates a meaningful channel: a modest reallocation by a concentrated large holder can change the supply-demand balance at the margin.

The most non-obvious angle in the brief is about substitution: is the equity bid being replaced by the bond bid, or does the bond bid fade first? The verified Reuters/TIC datapoint for May 2026 suggests both legs were bid: foreigners were net buyers of overall U.S. securities and U.S. equities specifically. That doesn’t rule out rotation, but it does shift the base case from “broad de-risking liquidation” toward “hedging and duration/risk rebalancing.”

Because the verified flow evidence here is macro (TIC net purchases) rather than issuer-specific, the most investor-relevant listed proxies are liquid ETFs that map to each leg: a long-duration Treasury exposure for the bond leg and a broad S&P 500 exposure for the equity leg. This lets you test whether market pricing is reacting to the narrative (both legs down) or to rotation (one leg reprices before the other).

The headline story is dramatic, but the verified TIC-derived evidence used here shows foreigners remain net buyers of U.S. securities and U.S. equities in the latest monthly datapoint Reuters reported. Meanwhile, foreign Treasuries holdings are still concentrated in large holder countries, which means the market can still experience sharp repricing if the marginal holder reallocates within U.S. risk buckets. For investors, the actionable “Sell America” risk is not whether foreign investors own less U.S. altogether—it’s whether they shift from equity risk into cash/short bills, or from long duration into shorter duration, before policy uncertainty fully re-prices the term premium.