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Foreign money flooded into US financial assets last year. The Treasury Department counted $1.55 trillion in inflows for 2025, a record that came even as Iran announced it was closing the Strait of Hormuz again starting April 21.
The scale of the buying spree is pretty much unprecedented. Foreign holdings of US equities now sit at nearly $21 trillion, which reinforces what traders have been saying for months—the US remains the go-to place when things get weird elsewhere. And things are getting weird. Iran’s semi-official Tasnim News Agency, which has ties to the Islamic Revolutionary Guard Corps, said the strait would stay closed until further notice. The announcement followed what Iran called an attack and continued US seizures of vessels linked to Tehran, including the tanker M/T Tifani.
Triple-Decline Days Drop to Decade Low
Markets have been calmer than expected given the headlines. The number of triple-decline days—when US stocks, the dollar, and bonds all fall together—dropped to just nine so far this year. That’s on track for the lowest annual count in 11 years. Back in the 1990s, investors saw 30 to 60 of these days every year on average. Not anymore.
The shift says something about confidence. Or maybe it’s complacency. Hard to tell. But the money keeps coming in, which is what matters for now.
Oil Transit Chokepoint Closed Again
The Strait of Hormuz handles roughly 21 million barrels of oil per day. That’s about 20% of the world’s supply moving through a narrow waterway between Iran and Oman. Its closure has already triggered force majeure declarations, and Brent crude prices climbed back toward $95 per barrel. Iran said the closure stays in place until it gets assurances about lifting US maritime restrictions.
The timing couldn’t be worse. Peace talks in Islamabad collapsed after 21 hours of negotiations. Vice President JD Vance said Iran rejected US terms on its nuclear program and the strait. AgResource warned the breakdown could delay the mid-May US-China summit, which would mess with international trade dynamics at a time when markets are already jittery.
Chinese soybean exports will probably slow down because of all this, though renewed buying could eventually push soybean futures higher. They’re trading around $11.88 per bushel right now. China needs oil that transits through Hormuz, so Beijing keeps pushing for regional stability. A fragile ceasefire is set to expire around April 22, and nobody seems confident it’ll hold.
The diplomatic mess adds layers to an already complicated situation. Iran’s move follows a pattern of escalating tensions, especially with ongoing US vessel seizures. The strait’s closure hits global oil supply and prices hard, rippling through energy markets worldwide. Traders are watching Brent crude closely as it inches toward that $95 mark, a level that could trigger broader inflation concerns if it holds or climbs higher.
Markets Stay Steady Despite Chaos
What’s striking is how resilient US markets have been through all this. Foreign investors aren’t pulling back—they’re doubling down. The $1.55 trillion inflow for 2025 dwarfs previous years, and it came during a period when geopolitical risk was supposed to scare money away. Instead, capital fled other regions and landed in US assets.
The decline in triple-decline days tells part of the story. When stocks, bonds, and the dollar used to fall together, it signaled broad panic. Now it happens less often, even with Iran closing a major oil route and peace talks falling apart. Some analysts think the Federal Reserve’s policy stance has given investors confidence. Others point to the lack of alternatives—European markets are struggling, and China’s economy remains uncertain.
Foreign equity holdings at $21 trillion represent a massive bet on American stability. But it’s also a vulnerability. If sentiment shifts, the reversal could be brutal.
The Islamabad talks were supposed to break the deadlock. They didn’t. After nearly a full day of negotiations, Iran walked away from US proposals on its nuclear program. The breakdown means the strait stays closed, oil prices stay elevated, and the risk of military escalation stays real. Vice President Vance didn’t sugarcoat it—the talks failed, and there’s no clear path forward.
AgResource’s warning about the US-China summit matters because trade flows are already disrupted. Delaying that meeting could extend uncertainty around tariffs, agricultural exports, and tech restrictions. Chinese buyers have been hesitant on soybeans, waiting to see how the Hormuz situation plays out. If the strait reopens quickly, buying could resume and lift futures. If it stays closed, supply chains get messier and prices get harder to predict.
China’s dependence on Hormuz oil puts Beijing in a tough spot. The country can’t afford a prolonged closure, but it also can’t force Iran to reopen the waterway. So Chinese officials keep calling for dialogue and stability, hoping someone else solves the problem. The ceasefire that expires around April 22 was already shaky. Now it seems unlikely to hold, which means the risk of military action is climbing.
Oil markets have seen this before. Iran closed the strait briefly in previous standoffs, and each time prices spiked before cooling off. But this closure feels different because it’s tied to broader diplomatic failures. The Islamabad talks were the best chance at de-escalation, and they collapsed. That leaves fewer options on the table and more room for miscalculation.
Brent crude at $95 per barrel isn’t catastrophic yet, but it’s getting close to levels that hurt economic growth. If prices push past $100 and stay there, inflation pressures build and central banks face harder choices. The Federal Reserve has been cautious about rate cuts, and sustained high oil prices would make those cuts even less likely.
Force majeure declarations from oil shippers mean contracts are getting suspended and deliveries are getting rerouted. That takes time and costs money. Tankers that usually transit Hormuz now have to go around Africa, adding weeks to journey times and pushing up freight costs. Those costs get passed along, which means higher prices at the pump and for anything that depends on petroleum products.
Iran’s insistence on assurances about maritime restrictions is basically a demand that the US stop seizing vessels. That’s not happening anytime soon. The US has been intercepting ships it says are violating sanctions, and Tehran sees those actions as illegal. Neither side is backing down, which is why the strait stays closed and why oil prices stay elevated.
The $1.55 trillion in foreign inflows happened despite all this mess. That’s the part that’s hard to explain. Geopolitical chaos usually sends money running for cover, but this time it ran toward US assets. Maybe investors think the chaos is temporary. Maybe they think the US is insulated from the worst of it. Or maybe there’s just nowhere else to put the money.
Frequently Asked Questions
How much did foreign investors put into US assets in 2025?
Foreign investors put a record $1.55 trillion into US financial assets in 2025, according to Treasury Department data. Foreign holdings of US equities now total nearly $21 trillion.
Why did Iran close the Strait of Hormuz?
Iran closed the Strait of Hormuz following what it called an attack and continued US seizures of Iran-linked vessels, including the tanker M/T Tifani. Iran says the closure will last until it receives assurances about lifting US maritime restrictions.
How much oil moves through the Strait of Hormuz daily?
Approximately 21 million barrels of oil per day transit through the Strait of Hormuz, representing about 20% of the world’s oil supply.
