US Equities Surge on Record Inflows as Eurozone Inflation Hits Three-Year High

US equities have attracted a record $942 billion in overseas investment over the past year, according to official data cited by the Financial Times. This surge in capital inflows coincides with robust gains in US stock markets, with the S&P 500 index up 13% and the Nasdaq rising 16% year-to-date. The US economy also showed stronger-than-expected growth in the second quarter, with GDP revised up to 2.2% on an annualized basis from the previous estimate of 1.5%, though it remains lower than the 2.5% rate seen in the first quarter.

Meanwhile, inflation in the eurozone reached a three-year high of 3.8% in September, up from 3.2% in August, driven by rising energy prices. Core inflation, which excludes volatile components like energy and food, edged up to 2.5% from 2.4%. Consumer confidence in the eurozone also declined, with the economic sentiment indicator falling to 97.9 in September from 98.4 in August, marking its first drop since April.

The yield on UK 30-year government bonds hit 6% last week for the first time since 1998, increasing borrowing costs amid global bond sell-offs. This trend was also seen in the US and Japan, where long-term bond yields reached multi-decade highs due to concerns over inflation and higher interest rates stemming from ongoing conflicts.

A key metric highlighting the AI investment boom shows that private fixed investment in information processing equipment and software now represents 7% of US GDP and 45% of non-residential private fixed investment. This surge in tech investment has significantly boosted economic growth, with tech contributing 41% of GDP growth in 2025, compared to an average of 10% from 2011 to 2019.