Global Capital Flow: US Stocks Remain a "Safe Haven" for Funds

In August 2026, despite increasing global market volatility, the latest strategy reports from Wall Street institutions show that global capital is accelerating into the US stock market. According to the latest data, net foreign inflow into US stocks reached a record $1.2 trillion in the first half of 2026, a 35% increase compared to the same period last year. This trend is expected to strengthen further in the second half, with several top investment banks forecasting that the annual foreign inflow could exceed the $2 trillion mark.

The head of global strategy at Morgan Stanley stated in the latest report: "Against the backdrop of increasing global economic uncertainty, the US stock market has demonstrated strong resilience and attractiveness. The relative advantages of the US economy, continuous improvement in corporate profitability, and leading position in technological innovation collectively form a solid foundation for continued global capital inflows."

Economic Fundamentals: The Relative Advantages of the US Economy

The US economy showed strong resilience in the first half of 2026. The latest data shows that US GDP grew by 3.8% in the second quarter, exceeding market expectations, while the unemployment rate remained at a healthy level below 4%. In contrast, economic growth in the Eurozone and Japan has significantly slowed, with inflationary pressures still present.

The chief economist at Goldman Sachs analyzed in the report: "The US economy has demonstrated a unique growth model with strong consumer spending, active business investment, and an elastic labor market. This economic fundamental advantage is one of the core factors attracting global capital to US stocks."

Notably, the US services PMI continued to expand in July, reaching 54.2, indicating sustained growth in service sector activities. Meanwhile, the manufacturing PMI also returned to expansion territory at 51.8, showing signs of recovery in manufacturing activities. These positive economic indicators provide solid support for the US stock market.

Technological Innovation and Industrial Upgrading

The US's leading position in technological innovation is a key factor attracting global capital to US stocks. In 2026, continuous breakthroughs in cutting-edge fields such as artificial intelligence, biotechnology, and clean energy have brought new growth momentum to US companies.

The head of global equity strategy at JPMorgan stated: "US companies' investment and output in technological innovation are far ahead, which is not only a driving force for the long-term growth of the US stock market but also an important factor attracting global capital. Especially in the AI field, US companies have established a clear competitive advantage that is expected to continue expanding in the coming years."

Continuous Improvement in Corporate Profitability

Corporate profitability is the foundation supporting the long-term rise of the US stock market. According to the latest earnings data, S&P 500 component companies' overall profits grew by 12.5% year-on-year in the second quarter of 2026, exceeding market expectations. Among them, the technology, healthcare, and industrial sectors performed particularly well, with profit growth rates reaching 18%, 15%, and 13% respectively.

The head of global equity strategy at UBS pointed out: "US companies have demonstrated strong profitability, thanks to their global competitiveness, technological innovation capabilities, and efficient operational management. Even in a rising cost environment, US companies can maintain profit growth by improving productivity and optimizing cost structures."

Policy Environment: The Positive Impact of Federal Reserve Policy Shift

In 2026, changes in the Federal Reserve's policy environment have had a profound impact on the US stock market. With inflation falling to around 2%, the market widely expects the Fed to initiate a rate-cutting cycle in September. This policy shift has brought positive catalysts to the US stock market.

The latest Federal Reserve meeting minutes show that most members support a 25 basis point rate cut at the September meeting, which would be the first since 2022. This policy shift not only reduces corporate financing costs but also helps boost investor confidence.

A global strategy analyst at Citigroup stated: "The beginning of the Fed's rate-cutting cycle will provide additional liquidity support to the US stock market while reducing corporate financing costs. Historically, the early stages of rate cuts have often been periods of good stock market performance, providing positive expectations for the US stock market's performance in the second half."

Global Asset Allocation: The Core Position of US Stocks

In global asset allocation, the US stock market still occupies a core position. According to the latest survey data, large institutional investors worldwide allocate an average of 45% of their stock assets to the US market, a ratio that has been rising continuously over the past five years.

The global chief investment officer at BlackRock pointed out: "The core position of the US market in global asset allocation is determined by multiple factors, including market depth, liquidity, corporate quality, and innovation capabilities. Even when other markets have lower valuations, the US market remains the preferred allocation target for global investors."

The Value of Diversified Allocation

For global investors, allocating to US stocks not only allows them to benefit from the growth of US companies but also achieves effective asset diversification. The US market has relatively low correlation with other major markets (such as Europe, Japan, etc.), providing investors with an effective tool for risk diversification.

The head of global asset allocation at Vanguard stated: "US stocks play a 'stabilizer' role in global asset portfolios. Compared to other markets, the US market has stronger resilience and stability, providing relatively robust performance for investors during market volatility."

Long-term Growth Potential

Looking ahead, the US stock market still has significant growth potential. According to historical data, the US stock market has achieved an average annual return of about 10% over the past 100 years, a performance that exceeds most other asset classes.

The head of global equity strategy at Fidelity Investment pointed out: "The US economy's innovation capabilities, entrepreneurial spirit, and sound legal system provide a solid foundation for the long-term growth of the US stock market. Even facing various challenges in the short term, the long-term growth potential of the US stock market cannot be ignored."

Risk Factors and Investment Recommendations

Although Wall Street institutions are generally optimistic about the prospects of the US stock market, they also remind investors to pay attention to potential risk factors. These mainly include valuation levels, geopolitical risks, and inflation uncertainties.

A global equity strategy analyst at JPMorgan advised: "When allocating to US stocks, investors should adopt a diversified strategy, focusing on balance across different industries and market capitalization styles. At the same time, they should closely follow Federal Reserve policy trends, geopolitical situations, and changes in corporate earnings to adjust their portfolios in a timely manner."

Sector Allocation Recommendations

According to the latest recommendations from Wall Street institutions, there are several key directions worth paying attention to in the US stock market in the second half of 2026:

  • Technology Sector: Innovation breakthroughs in AI, cloud computing, semiconductors and other fields will continue to drive tech stock performance
  • Healthcare: Population aging and medical technology innovation will support the long-term growth of the healthcare sector
  • Financial Sector: The rate-cutting cycle will bring positive impacts to banks and insurance companies
  • Industrial Sector: Global manufacturing recovery and infrastructure investment will drive industrial stock performance

Investment Strategy Recommendations

For different types of investors, Wall Street institutions have provided differentiated investment recommendations:

  • Long-term Investors: Recommended to adopt a core-satellite strategy, with low-cost ETFs as the core allocation supplemented by selected individual stocks
  • Medium-term Investors: Focus on sector rotation opportunities and capture structural opportunities during the rate-cutting cycle
  • Short-term Traders: Focus on trading opportunities brought by market volatility, while paying attention to risk management

Conclusion: Why Buying US Stocks Remains the Core Logic of Global Capital Allocation

Based on the latest views from Wall Street institutions, the core logic behind global capital's continued increase in US stock holdings can be summarized as follows:

  • The relative advantages of the US economy continue to manifest, with robust economic growth and a healthy labor market
  • US companies maintain a global leading position in technological innovation and profitability
  • The Federal Reserve's policy shift will provide additional liquidity and valuation support to the market
  • US stocks have an irreplaceable core position in global asset allocation
  • Looking ahead, the US stock market still has significant growth potential

Despite facing various short-term challenges and uncertainties, Wall Street institutions generally believe that the US stock market remains a "must-have" in global capital allocation. For investors seeking long-term growth and asset appreciation, the US stock market provides unique opportunities and advantages.

As the second half of 2026 unfolds, the US stock market is expected to continue playing a dual role as both a "safe haven" and "growth engine" amidst changes in the global economic landscape. Investors should closely monitor market dynamics, capture structural opportunities, and achieve steady asset appreciation.