Foreign investors directed more capital into U.S. equities than U.S. Treasuries for the first time this century, excluding temporary disruptions surrounding the 2008 financial crisis and the COVID-19 pandemic, the Financial Times reported. Deutsche Bank’s analysis of U.S. Treasury International Capital data found that foreign equity inflows averaged 2.8% of U.S. GDP over the year through June 2026, compared with 2% for Treasuries. Private foreign investors led the shift, while central banks and sovereign wealth funds were steadier or sometimes net sellers. The change comes as U.S. national debt exceeded $40 trillion in August 2026, the 10-year Treasury yield rose above 5% around mid-September and the 30-year yield reached 5.32%. Foreign Treasury holdings stood at roughly $9.3 trillion in June, or about 30% to 32% of publicly held U.S. debt. The allocation shift could make the dollar more sensitive to equity sentiment, while higher yields increase government interest costs and may pressure stock valuations. The S&P 500 was up roughly 12% this year, and second-quarter net income for its companies rose 52% year over year, or 34% excluding one-time AI-related gains at Amazon and Alphabet. The equity preference could persist while private-sector growth offsets fiscal deterioration but reverse if higher rates weigh sufficiently on equities.