European Investors Retreat from US Stocks Amid Trump Trade Tensions

European investors are beginning to withdraw from US equities as trade threats from former President Donald TRUMP escalate. Trump has repeatedly touted the stock market's record highs under his watch, even suggesting it could double from current levels. However, his aggressive rhetoric toward Europe—including recent tariff announcements targeting eight nations—is now driving capital flight.

Vincent Mortier, CIO of Amundi SA, Europe's largest asset manager with €2.3 trillion in assets, confirms a growing client demand to diversify away from US exposures. "We saw the trend emerge in April 2025, but this week marked an acceleration," Mortier told Bloomberg. The S&P 500 dropped 2.1% following Trump's latest trade policy announcement.

With Europeans holding 49% of all foreign-owned US stocks—a staggering $10.4 trillion position—the pullback could have material market consequences. Scotiabank strategist Hugo Ste-Marie notes that over half this exposure comes from the eight countries now facing Trump's tariffs.