Investors fled to Europe and Japan after Trump’s tariffs jolted U.S. markets, Bank of America says

In Washington, D.C., U.S. President Donald Trump gave a speech at the White House on April 2, 2025.

Recently, there has been significant instability in stock markets, both on Wall Street and globally, due to President Trump’s implementation of tariffs, pausing some, and increasing duties on Chinese goods. Bank of America analysts shared insights on where the money leaving the U.S. might be going.

Their analysis revealed that there was an $8.9 billion outflow from U.S. equities in the week ending April 30. For every $100 invested in American stocks since the 2024 election, $5 had been withdrawn over the past three weeks, according to the bank’s strategists in a client note on May 1. European equities, on the other hand, saw a $3.4 billion inflow as per data from the Wall Street bank.

During the same period, Japanese equities experienced a $4.4 billion inflow, marking their largest weekly inflow since April 2024. Investors appeared to be leaning towards risk-taking, as shown by $2.3 billion and $3.9 billion inflows into cryptocurrencies and high-yield bonds, respectively. Conversely, there were outflows of $6 billion from gold and U.S. Treasury bonds combined.

Bank of America also noted that its private clients, who collectively hold $3.7 trillion in assets, were increasingly concerned about deflation in the U.S. compared to inflation risks in the past four weeks. Investors were observed buying shares in utilities and low-volatility high-dividend ETFs, considered safe during deflationary periods, while selling inflation-hedging assets like debt instruments, inflation-protected Treasury bonds, and financial sector ETFs.