Fund flows signaled a shift in investor positioning during the latest week. Bank of America said investors pulled nearly $17 billion from US-focused equity funds, citing EPFR Global data.
The bank pointed to stronger demand outside the United States. European stock funds recorded their strongest six-week inflow since June, and Japanese funds posted their biggest weekly additions since October.
Emerging markets also attracted fresh allocations. The $134 billion iShares Core MSCI Emerging Markets exchange-traded fund (ETF) is headed for its largest monthly inflow since its 2012 launch.
Geopolitics stayed in the background for risk assets. US officials sought revisions to defense arrangements with Denmark to expand military flexibility in Greenland, people familiar with the matter said.
Trade tensions eased after earlier volatility. Bank of America said the data largely captured flows before President Donald Trump softened his Greenland rhetoric during a turbulent stretch.
The bank also said Trump later dropped tariff threats after NATO, the North Atlantic Treaty Organization, Secretary General Mark Rutte helped secure a breakthrough at the World Economic Forum in Davos.
Cross-asset pricing reflected demand for hedges. West Texas Intermediate crude rose 2.3% to $60.74 a barrel, and spot gold gained 0.6% to $4,964.40 an ounce.
Treasuries held steady, with the 30-year yield near 4.83%. Germany’s 10-year yield stayed around 2.89%, while Britain’s 10-year yield rose two basis points to 4.49%.
Earnings now drive the next test for valuations. Companies representing more than a third of the S&P 500’s market value are due to report, keeping the S&P 500’s weekly decline in focus.