Catenaa, Wednesday, October 07, 2026- Global investors made $942 billion in net purchases of US equities in the 12 months up to July, while the US is on track for the highest FDI inflow in history.
According to Merrill CIO Capital Market Outlook, net purchases of US equities in Q2 alone surged to $426 billion, a rise of 62% from the same period in 2025.
China was the largest net buyer of US equities over the period, followed by Taiwan and South Korea, according to Merrill. The report linked the flows partly to the large trade surpluses generated by the region’s AI-related industries.
“In the end, strong portfolio inflows suggest that international investors remain willing to increase their exposure to the world’s largest capital market, that’s bullish for US assets,” Joseph Quinlan, Managing Director and Head of Market Strategy at Merrill, said in the report.
Meanwhile, Merrill also said that FDI inflows to the US totaled nearly $240 billion in the first half of 2026, a 103% surge from a year ago, highlighting the growing push among foreign multinationals to be inside the US.
This record surge in the first half indicates that FDI inflows are on track for a record year, estimated at $480 billion for 2026, according to Merrill.
Merrill report said that rising US trade protectionism has caused foreign multinationals to want to be “inside” the US economy; the massive consumer purchasing power causes foreign firms to prefer being closer to US customers; the massive AI and AI-related investments have created various investment opportunities that foreign nationals don’t want to miss out on; and the abundant energy supply, tech ecosystem, and capital markets have induced more FDI inflows.
Merrill also said that spending in July and August remained much stronger than labor market conditions alone, averaging 3.7% annualized growth.
“Upside revisions to net interest income and personal saving suggest households have benefited from more income than was previously apparent, with personal saving revised higher back to 2023,” it said.
According to the BEA, the January to July 2026 savings rate averaged 4.8% versus 3.3% pre-revision, strengthening consumer spending underpinnings despite moderate hiring, high energy prices, and rising borrowing costs.
