Investors Are Fleeing The US For Europe
- 22.02.2026, 3:00
Two reasons are cited.
A shift in investment priorities, a boom in defense spending in Europe and signs of a slowdown in the U.S. economy are forming a new trend in global capital markets.
As The Financial Times reports, international investors are actively transferring funds from the U.S. market to European assets.
The publication estimates that already in the first half of February, the weekly inflow of investments in European stocks reached about $10 billion. If the dynamics continues, the month may set an absolute record for investments in European stock markets.
The first reason is the overload of the U.S. technology stocks
One of the key factors analysts call the structure of the U.S. stock market.
In recent years, the share of IT-companies, primarily related to artificial intelligence, has grown dramatically. As a result, many global funds are seeking to diversify risks and reduce dependence on the technology sector.
European stock exchanges are perceived as more "traditional": they have a higher share of banks, commodity companies, industry and energy, which makes them attractive for rebalancing portfolios.
A second reason is the growth of the defense and industrial economy in Europe
An additional incentive for investors is the increase in public spending by European countries on defense technology and industry.
An additional incentive for investors is the increase in government spending on defense technology and industry.
The Politico publication, citing data from the U.S. Department of Commerce, writes that by the end of 2025, the growth rate has slowed significantly.
The fourth quarter GDP increased by only 1.4%, while annual inflation reached about 3% in December.
The authors of the publication believe the situation was affected by prolonged budget shutdowns and a decline in consumer spending.
The combination of weak macroeconomic data interrupted a series of positive reports that the administration of President Donald Trump had previously cited as proof of the effectiveness of its economic policy.
Trump himself blamed the economic problems on Democrats in Congress who failed to support the budget, as well as Federal Reserve Chairman Jerome Powell, who refused to cut interest rates.
Despite slowing toward the end of the year, the U.S. economy had performed strongly in previous quarters.
After a 0.5% decline in the first quarter (due in part to a surge in imports before the new tariffs were imposed), GDP grew at a 3.8% annualized rate in the second quarter and accelerated to 4.4% in the third quarter, one of the best performances in recent years.
At the end of 2025, the U.S. economy as a whole is expected to grow by 2.2% - notably lower than the 2.8% growth rate in 2024.