Foreign investors have begun selling their record holdings of U.S. stocks at the 3rd fastest pace in history, with Deutsche Bank estimating that over $1 trillion could be sold. This sell-off follows a period of significant investment in U.S. equities by foreigners, which some analysts viewed as a sign of market euphoria. The shift in investment behavior is driven by rising uncertainty around President Donald Trump's tariff policies, as noted by Yardeni Research. Investors are increasingly looking at alternatives such as European and Chinese stocks, which have seen gains of 9% this year, contrasting with a decline in U.S. stocks. In response to market volatility and high valuations of U.S. stocks, investors are diversifying into alternative assets like gold, corporate debt, and Treasury indexes. The S&P 500 has faced a correction, and its forward P/E ratio remains high at 21x, suggesting that U.S. stocks may still be overvalued compared to other markets. Investors are all-in on U.S. stocks, prompting a shift towards diversification.