A dose of AI, tariff relief

Making sense of the forces driving global markets

By Jamie McGeever, Reuters Open Interest Markets Columnist 

Stocks rebounded on Tuesday, lifted by a sense that recent fears around AI disruption were overdone, as investors also digested a surprise tariff reduction from U.S. President Donald Trump and looked forward to tech giant Nvidia's earnings.

More on that below. In my column today I look at why, although U.S. equity markets are lagging their global peers, the 'Sell America' narrative may just be hot air - the numbers show that foreign purchases of U.S. assets have never been higher.

I'd love to hear from you, so please reach out to me with comments at jamie.mcgeever@thomsonreuters.com. You can also follow me at @ReutersJamie and @reutersjamie.bsky.social. 

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* Pause for breath

The gloom that has hung heavily over U.S. stocks lifted a bit on Tuesday as investors looked on AI lab Anthropic's latest new technology plug-ins, targeting industries such as investment banking and HR, in a more tolerant and favorable light. 

Shares that had been crushed, partly by Anthropic's recent AI tool launches, clawed back some losses - Thomson Reuters jumped 11.5%, the biggest rise since 2008. But don't get too excited. The S&P 500 software and services index, which has lost over 20% in less than four weeks, rebounded only 1%. Hardly a sign investors are desperate to get back in.

* Trump's tariff turnaround

A timeline: On Friday the U.S. Supreme Court ruled against most of President Donald Trump's tariffs, prompting him to sign an order imposing temporary 10% global tariffs; On Saturday Trump said he would raise this to 15%; On Monday that was lowered back to 10%, although Trump is still looking to increase it to 15%. 

Confused? You should be. Policymakers around the world are trying to make sense of it too - officials in Europe, Japan, Britain and elsewhere have said they hope the trade deals they struck with the U.S. last year will be honored. But will they? Perhaps Trump will provide more clarity around his intentions in the State of the Union address to Congress later on Tuesday.        

* Yuan way traffic

The bullish momentum behind China's yuan is quite something. The onshore yuan on Tuesday clocked its biggest rise against the dollar this year, rising for an eighth consecutive trading session. That's its longest winning streak since April, 2024. The last time it rose nine days in a row was September, 2010. 

Much of Tuesday's move was down to the market re-opening after Lunar New Year holiday. The trend is clear. Interestingly, however, Beijing is likely still intervening heavily to limit the currency's upside, recycling record trade surplus inflows into foreign assets. Including Treasuries.  

Squaring 'Sell America' with record foreign inflows

With the fog of uncertainty around U.S. President Donald Trump's tariffs suddenly thickening again, foreign investors' appetite for U.S. assets is under renewed scrutiny. Yet capital from overseas keeps flowing into U.S. markets at a record rate. So is the "Sell America" trade overblown? Probably.

Trump's controversial policies and erratic decision-making may dim the allure of U.S. assets, yet the hard numbers show that foreign capital inflows have risen, not fallen, during the volatile first year of his second administration.

Treasury International Capital figures published last week showed that net foreign purchases of U.S. stocks and bonds in calendar year 2025 totaled a record $1.55 trillion. That was up 30% from the year before. 

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